UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_______________
Form
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
_______________
Date of
Report (Date of earliest event reported) May
26, 2005 (May 20, 2005)
Cendant
Corporation
(Exact
name of Registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction
of
incorporation) |
1-10308
(Commission
File No.) |
06-0918165
(I.R.S.
Employer
Identification
Number) |
|
9
West 57th
Street
New
York, NY
(Address
of principal
executive
office) |
10019
(Zip
Code)
|
Registrant's
telephone number, including area code (212)
413-1800
| None | ||
|
(Former
name or former address if changed since last report) |
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
Item
1.01 |
Entry
into a Material Definitive
Agreement. |
On May
20, 2005, our Budget Rent A Car System, Inc. subsidiary entered into six
separate sale/leaseback transactions with different institutional investors as
lessors, pursuant to which Budget sold and leased back new gas and diesel engine
trucks having an aggregate purchase price, including transaction costs, of
$77,676,100. Budget entered into similar sale/leaseback transactions with six
different institutional investors on March 30, 2005 relating to vehicles having
an aggregate purchase price, including transaction costs, of $88,280,641, making
the aggregate purchase price, including transaction costs, of these similar
transactions completed during 2005 $165,956,741. During
2004, Budget entered into similar sale/leaseback transactions with fourteen
different institutional investors relating to vehicles having an aggregate
purchase price, including transaction costs, of $243,612,564. Pursuant to
these transactions, ownership of the subject vehicles has been transferred to
the lessors and leased to Budget for base lease periods of 42 months, in the
case of gas engine vehicles, and 54 months, in the case of diesel engine
vehicles. Budget has the option to renew the leases in respect of any vehicle
for a renewal period of 12 months.
Budget
may be obligated to make stipulated termination payments if certain casualty or
similar events occur with respect to one or more of the vehicles or if certain
events of default occur under the leases. Events of default include failure to
make payments under the leases within agreed grace periods, bankruptcy events
with respect to Budget or Cendant and failure on the part of Budget or Cendant
to comply with covenants contained in the lease documents, including covenants
to maintain insurance and regarding permitted mergers or sales of assets.
Cendant
has guaranteed the obligations of Budget under the lease documents.
A copy of
the forms of Participation Agreement, Lease and Guaranty executed in connection
with the foregoing transactions are attached as Exhibit
10.1, Exhibit 10.2 and Exhibit 10.3
respectively, and incorporated by reference herein.
|
Item
2.03 |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
|
The
information described above under “Item 1.01 Entry into a Material Definitive
Agreement” is hereby incorporated herein by reference.
|
Item
9.01 |
Financial
Statements and Exhibits. |
|
(c) |
Exhibits |
|
10.1 |
Form
of Participation Agreement | |
|
10.2 |
Form
of Lease | |
|
10.3 |
Form
of Guaranty |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
CENDANT
CORPORATION | ||
| |
|
|
| By: |
/s/ Eric J. Bock | |
|
Eric
J. Bock
Executive
Vice President, Law and
Corporate Secretary | ||
Date: May
26, 2005
CENDANT
CORPORATION
CURRENT
REPORT ON FORM 8-K
Report
Dated May 26, 2005 (May 20, 2005)
EXHIBIT
INDEX
|
10.1 |
Form
of Participation Agreement | |
|
10.2 |
Form
of Lease | |
|
10.3 |
Form
of Guaranty |
Exhibit
10.1
PARTICIPATION
AGREEMENT
(BRAC
Trust No. 2005-[ ])
dated as
of
May ___,
2005
among
BUDGET
RENT A CAR SYSTEM, INC.,
as
Lessee,
WILMINGTON
TRUST COMPANY,
|
|
in its individual capacity only to the extent
expressly stated herein and otherwise solely in its capacity as Owner
Trustee under the Trust Agreement (BRAC Trust No. 2005-[
]), |
|
BRAC
Trust No. 2005-[ ],
as Owner
Trust,
CENDANT
CORPORATION,
as
Guarantor
and
[OWNER
PARTICIPANT]
Participation
Agreement
TABLE
OF CONTENTS
|
Page | ||
|
SECTION
1. |
DEFINITIONS |
1 |
|
SECTION
2. |
PURCHASE
AND LEASE; ETC. |
1 |
|
2.1
Payment of Total Cost |
1 | |
|
2.2
Time and Place of Fundings. |
1 | |
|
2.3
Funding Notices by Lessee |
2 | |
|
2.4
Application of Funds; Sale and Lease of the Vehicles |
2 | |
|
2.5
Certain Conditions to be Satisfied on the Closing Date |
3 | |
|
2.6
Appraisal |
4 | |
|
2.7
Opinions of Counsel |
4 | |
|
2.8
Owner Participant’s Instructions to Owner Trust |
4 | |
|
2.9
Failure to Fund |
5 | |
|
SECTION
3. |
CONDITIONS
TO FUNDINGS |
5 |
|
3.1
Conditions to the Obligations of Owner Participant |
5 | |
|
3.2
Conditions to the Obligations of Lessee |
7 | |
|
3.3
Conditions to the Obligations of Owner Trust |
8 | |
|
SECTION
4. |
REPRESENTATIONS,
WARRANTIES AND COVENANTS |
8 |
|
4.1
Representations, Warranties and Covenants of Lessee and
Guarantor |
8 | |
|
4.2
Representations, Warranties and Covenants of Owner
Participant |
13 | |
|
4.3
Representations, Warranties and Covenants of the Bank and the Owner
Trustee |
14 | |
|
4.4
Brokerage Representation |
15 | |
|
SECTION
5. |
COVENANTS |
15 |
|
5.1
General Non-Tax Indemnification by Lessee |
15 | |
|
5.2
General Tax Indemnity |
18 | |
|
5.3
Further Covenants of Lessee and Guarantor |
26 | |
|
5.4
Merger, Consolidation, Sale |
26 | |
|
SECTION
6. |
SURVIVAL
AND EFFECT OF WARRANTIES, AGREEMENTS AND INDEMNITIES |
28 |
|
6.1
Survival of Agreements, Representations, Warranties and
Indemnities |
28 | |
|
6.2
Effect of Other Indemnities |
28 | |
|
SECTION
7. |
EXPENSES |
28 |
|
7.1
Lessor’s Transaction Costs |
28 | |
|
7.2
Lessee’s Transaction Costs |
29 | |
|
SECTION
8. |
NOTICES |
29 |
|
SECTION
9. |
TRANSFERS |
29 |
|
9.1
Transfers by Owner Participant |
29 | |
|
9.2
Transfers by Owner Trust |
31 | |
Participation
Agreement
|
SECTION
10. |
CERTAIN
COVENANTS OF OWNER TRUST AND OWNER PARTICIPANT |
32 |
|
10.1
Certain Covenants of Owner Participant |
32 | |
|
10.2
No Creation of Owner Trustee’s Liens by the Bank |
32 | |
|
SECTION
11. |
CONFIDENTIALITY |
32 |
|
SECTION
12. |
LESSEE’S
RIGHT OF QUIET ENJOYMENT; OWNERSHIP FOR FEDERAL TAX
PURPOSES |
33 |
|
SECTION
13. |
MISCELLANEOUS |
34 |
|
SCHEDULE
I |
- |
Schedule
of Accounts |
|
SCHEDULE
II |
- |
U.C.C.
Filings Being Made on Closing Date |
|
SCHEDULE
III |
- |
Parties |
|
SCHEDULE
IV |
- |
Eligible
Vehicles |
|
SCHEDULE
V |
- |
Transaction
Costs |
|
SCHEDULE
VI |
- |
Variations |
|
| ||
|
EXHIBIT
A |
- |
Form
of Section 3.1(a)(ii) Officer’s Certificate |
|
EXHIBIT
B-l |
- |
Form
of Closing Date Opinion of White & Case, Special Counsel for the
Lessee and the Guarantor |
|
EXHIBIT
B-2 |
- |
Form
of Closing Date Opinion of Corporate Counsel for Lessee
|
|
EXHIBIT
B-3 |
- |
Form
of Closing Date Opinion of Corporate Counsel for the Guarantor
|
|
EXHIBIT
B-4-A |
- |
Form
of Closing Date Opinion of Richards, Layton and Finger, P.A., Special
Counsel for the Owner Trust |
|
EXHIBIT
B-4-B |
- |
Form
of Closing Date Opinion of Richards, Layton and Finger, P.A., Special
Counsel for the Owner Trustee |
|
EXHIBIT
B-5 |
- |
Form
of Closing Date Opinion of Thelen, Reid & Priest, Special Counsel for
the Owner Participant |
|
EXHIBIT
B-6 |
- |
Form
of Closing Date Opinion of Corporate Counsel for the Owner
Participant |
|
EXHIBIT
B-7 |
- |
Form
of Closing Date Opinion of Richards, Layton and Finger, P.A., Special
Counsel for the Nominee |
Participation
Agreement
-ii-
|
EXHIBIT
B-8 |
- |
Form
of Closing Date Opinion of Oklahoma Counsel |
|
EXHIBIT
C-l |
- |
Form
of Power of Attorney of the Nominee re Titling and Registering
Vehicles |
|
EXHIBIT
C-2 |
- |
Form
of Power of Attorney of the Lessor re Perfecting Security
Interests |
|
EXHIBIT
C-3 |
- |
Form
of Power of Attorney re Sale of Vehicles |
|
EXHIBIT
C-4 |
- |
Form
of Power of Attorney re Release of Security Interests |
|
EXHIBIT
D |
- |
Form
of Funding Request |
|
EXHIBIT
E |
- |
Form
of Bill of Sale |
|
APPENDIX
A |
- |
Definitions |
Participation
Agreement
-iii-
PARTICIPATION
AGREEMENT (BRAC Trust No. 2005-[ ])
PARTICIPATION
AGREEMENT (BRAC Trust No. 2005-[ ]), dated as of May ___, 2005, among
(i) BUDGET RENT A CAR SYSTEM, INC., a Delaware corporation, as Lessee; (ii)
WILMINGTON TRUST COMPANY, a Delaware banking corporation, acting in its
individual capacity only to the extent expressly stated herein and otherwise
solely in its capacity as Owner Trustee under the Trust Agreement, (iii) BRAC
TRUST NO. 2005-[ ], a Delaware statutory trust, as Owner Trust, (iv) CENDANT
CORPORATION, a Delaware corporation, as Guarantor; and (v) [OWNER PARTICIPANT],
a [ ], as Owner Participant.
The Owner
Trust desires to purchase, on each Funding Date, certain Eligible Vehicles and
lease such Vehicles to the Lessee and the Lessee desires on each such Funding
Date to lease such Eligible Vehicles from the Owner Trust. In order to finance
the purchase price of such Eligible Vehicles, the Owner Participant will make
investments in the trust created by the Trust Agreement.
In
consideration of the mutual agreements herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
|
SECTION
1. |
DEFINITIONS |
The
definitions in Appendix A hereto shall apply for all purposes of this
Participation Agreement, except where otherwise specifically provided
herein.
|
SECTION
2. |
PURCHASE
AND LEASE; ETC. |
2.1
Payment of Total Cost.
(a) Subject to the terms and conditions hereinafter set forth, and in
reliance on the representations and warranties contained herein or made pursuant
hereto, on each Funding Date the Owner Participant shall make available to the
Owner Trust an investment in the trust created by the Trust Agreement in an
amount equal to the aggregate Purchase Price of the Vehicles specified in the
relevant Funding Date Lease Supplement. In no event shall the Owner Participant
be required to provide investments under this Participation Agreement in an
aggregate amount exceeding the Owner Participant’s Commitment.
(b) Remittances
pursuant to this Section 2.1 shall be made in immediately available federal
funds by wire transfer to the account of the Owner Trust set forth in Schedule I
hereto and must be received by the Owner Trustee by 11:00 a.m., New York time,
on the Funding Date.
2.2
Time and Place of Fundings.
(a) The following shall be applicable to Fundings:
(i) no more
than [one (1)] Fundings may occur;
(ii) each
Funding shall occur on a Business Day on or after the Closing Date and on or
before [September 30], 2005; and
Participation
Agreement
(iii) each
Funding shall provide for financing of the Eligible Vehicles having an aggregate
Purchase Price that equals or exceeds $ ________, unless the Owner Participant
shall waive such minimum amount.
(b) The
closing for each Funding shall take place on the Funding Date therefor
commencing at 9:00 a.m., New York City time, at the offices of White & Case
LLP, 1155 Avenue of the Americas, New York, New York 10036.
2.3
Funding Notices by Lessee.
With respect to each Funding (unless waived by the parties hereto), the Lessee
shall, not later than 1:00 p.m. New York time, on the third Business Day prior
to the date on which the Funding is proposed to occur, provide an irrevocable
notice to the Owner Trust and the Owner Participant, substantially in the form
of Exhibit D, specifying (a) the Funding Date, (b) with respect to the
Eligible Vehicles to be purchased on such Funding Date, the Specific
Identification, Purchase Price and Scheduled Expiration Date of such Eligible
Vehicles, (c) the aggregate Purchase Price of all such Eligible Vehicles and (d)
in the event such Funding Date is to be the Final Funding Date, that such
Funding Date is to be the Final Funding Date. As promptly as practicable after
the Owner Participant’s receipt of such notice, the Owner Participant shall
provide proposals for the Per Diem Rent Factor (if applicable), the Quarterly
Rent Factor and the percentages to be used in the calculation of Termination
Value pursuant to Section 3.3(a) of the Lease. Such proposed rent factors and
values shall be subject to verification by the Lessee that such proposals have
been prepared in accordance with the pricing assumptions specified on
Schedule III to the Lease. Upon verification, such proposed values shall
be incorporated into the Lease Supplement to be delivered on the proposed
Funding Date. In the
event that the Owner Participant and the Lessee shall not agree on the Per Diem
Rent Factor (if applicable), Quarterly Rent Factor and the percentages to be
used in the calculation of Termination Value, such proposed Funding shall be
postponed until such time as the Owner Participant and the Lessee shall so
agree, provided that the Funding Date shall not be postponed past April 30,
2005.
2.4
Application of Funds; Sale and Lease of the Vehicles.
On each Funding Date, upon (a) receipt by the Owner Trust of the investment
required to be made by the Owner Participant pursuant to Section 2.1 and (b)
satisfaction or waiver of the conditions set forth in Section 3.1, (i) the Owner
Trust shall purchase and assume ownership of the Vehicles to be acquired by the
Owner Trust on such Funding Date, as specified in the notice delivered pursuant
to Section 2.3, the Bill or Bills of Sale delivered to the Owner Trust on such
Funding Date and the Funding Date Lease Supplement executed on such Funding
Date, (ii) in consideration therefor, the Owner Trust shall pay, from the funds
made available by the Owner Participant pursuant to Section 2.1, an amount equal
to the aggregate Purchase Price of the Vehicles then being sold and purchased
pursuant hereto, in immediately available federal funds remitted by wire
transfer to the account of the Lessee set forth in Schedule I hereto (or
as otherwise specified by the Lessee to the Owner Trust in writing at least
three Business Days before such Funding Date) and (iii) the Owner Trust shall
lease and deliver to the Lessee and the Lessee shall accept delivery of and
lease from the Owner Trust such Vehicles pursuant to the Lease. Delivery of the
Vehicles to the Owner Trust on each Funding Date shall be effected by the
delivery to the Owner Trust of one or more Bills of Sale specifically
identifying the Vehicles delivered on such Funding Date. Delivery of the
Vehicles to the Lessee on each Funding Date shall be effected by the delivery of
the applicable Lease Supplement.
Participation
Agreement
-2-
2.5
Certain Conditions to be Satisfied on the Closing Date.
On the Closing Date the following conditions shall have been
satisfied:
(a) A fully
executed counterpart of each of the following documents shall have been
delivered to each party hereto (except that the original counterpart of the
Lease bearing the Owner Trust’s signed receipt shall have been delivered only to
the Owner Trust):
(i) this
Participation Agreement;
(ii) the
Lease;
(iii)
the
Guaranty;
(iv) the Trust
Agreement;
(v) the
Nominee Agreement;
(vi) the
Nominee Trust Agreement;
(vii)
the
Nominee Trust Supplement;
(viii) the Tax
Indemnity Agreement; and
(ix) the
Powers of Attorney.
(b) A
certificate of each of the Lessee, the Guarantor, the Nominee, the Owner
Participant and the Owner Trust, signed by an appropriate officer thereof, with
respect to (A) the authority and incumbency and specimen signatures of the
officers executing and delivering the Operative Documents to which such Person
is or will become a party and (B) the pertinent charter and By-Laws shall have
been delivered to each of the parties hereto.
(c) A copy of
resolutions of the Board of Directors or appropriate Committee of the Board of
Directors of each of the Lessee, the Guarantor, the Owner Participant and the
Owner Trustee, certified by the Secretary or an Assistant Secretary of such
Person, duly authorizing the execution, delivery and performance by such Person
of the Operative Documents to which such Person is or will become a party shall
have been delivered to each of the parties hereto to the extent that such
resolutions are required for such execution, delivery and performance.
(d) Evidence
with respect to each of the Lessee and the Guarantor that it is a corporation in
good standing and qualified to do business in the state of Delaware shall have
been delivered to each of the parties hereto.
(e) Certificates
of insurance naming the Owner Trust, the Owner Participant and the Nominee as a
named additional insured or lender loss payee, as applicable, and otherwise
complying with Section 8 of the Lease shall have been delivered to the Owner
Trust, the Owner Participant and the Nominee.
Participation
Agreement
-3-
(f) UCC
financing statements as set forth on Schedule
II hereto
shall have been made available for delivery to the appropriate filing offices
for filing, with copies thereof provided to each of the parties
hereto.
(g) The
statements set forth in paragraphs (e), (f) and (g) of Section 3.1 shall be true
and correct on and as of the Closing Date and the Owner Trust and the Owner
Participant shall have received an Officer’s Certificate of the Lessee and the
Guarantor with respect thereto.
(h) The
Lessor and the Owner Participant shall have received a duly executed TRAC
Certificate in the form of Exhibit
A to the
Lease.
2.6
Appraisal.
On the Closing Date, the Owner Participant shall have received from the
Appraiser an opinion reasonably satisfactory to the Owner Participant with
respect to the fair market value and estimated useful life of the Eligible
Vehicles as of the Closing Date, the estimated fair market value of the Eligible
Vehicles as of the expiration dates of the Base Term and the Renewal Term and
such other matters as the Owner Participant may require.
2.7
Opinions of Counsel.
On the Closing Date (a) White & Case LLP, special counsel for the Lessee and
the Guarantor, shall have delivered its legal opinion, addressed to the Owner
Participant and the Owner Trust, substantially in the form of Exhibit
B-1; (b) Karen C. Sclafani, corporate counsel for the Lessee, shall have
delivered her legal opinion, addressed to the Owner Participant and the Owner
Trust, substantially in the form of Exhibit B-2; (c) Eric J. Bock,
corporate counsel for the Guarantor, shall have delivered his legal opinion,
addressed to the Owner Participant and the Owner Trust, substantially in the
form of Exhibit B-3; (d) Richards, Layton & Finger, P.A., special
counsel for the Owner Trust, shall have delivered its legal opinion, addressed
to the Owner Participant, the Lessee and the Guarantor, substantially in the
form of Exhibit B-4-A; (e) Richards, Layton & Finger, P.A., special
counsel for the Owner Trustee, shall have delivered its legal opinion, addressed
to the Owner Participant, the Lessee and the Guarantor, substantially in the
form of Exhibit B-4-B; (f) Thelen Reid & Priest LLP, special counsel
for the Owner Participant, shall have delivered its legal opinion addressed to
the Owner Trust, the Lessee and the Guarantor, substantially in the form of
Exhibit B-5; (g) in-house counsel for the Owner Participant shall have
delivered his or her legal opinion, addressed to the Lessee and the Guarantor,
substantially in the form of Exhibit B-6; (h) Richards, Layton &
Finger, P.A., special counsel for the Nominee, shall have delivered its legal
opinion, addressed to the Owner Trust, the Owner Participant, the Lessee and the
Guarantor, substantially in the form of Exhibit B-7; (i) special Oklahoma
counsel for the Lessee shall have delivered its legal opinion, addressed to the
Owner Participant and the Owner Trust, in form and substance reasonably
satisfactory to the Owner Participant; and (j) the Owner Participant shall have
received from Thelen Reid & Priest LLP, special counsel for Owner
Participant, a favorable opinion, in form and substance reasonably satisfactory
to the Owner Participant and dated the Closing Date, with respect to certain
federal income tax consequences arising out of its participation in the
transactions contemplated hereby.
2.8
Owner Participant’s Instructions to Owner Trust.
Subject to the terms and conditions set forth herein, the Owner Participant
hereby authorizes and directs the Owner Trust to, and the Owner Trust hereby
declares and agrees that it will, (a) purchase the Vehicles being sold and
purchased pursuant hereto, if and as required hereby; (b) execute and deliver
the
Participation
Agreement
-4-
Operative Documents to which it is intended to be a
party and any other documents, instruments or certificates it is required to
execute and deliver on each Funding Date or otherwise pursuant hereto; and (c)
take all actions required to be taken by the Owner Trust pursuant to the
Operative Documents.
2.9
Failure to Fund.
If the Lessee does not agree on the Per Diem Rent Factor (if applicable), the
Quarterly Rent Factor and the percentages to be used for calculating Termination
Value pursuant to Section 3.3(a) of the Lease and Section 2.3 hereof (the “Rent
Factors”) on or before the proposed Funding Date, then the Funding Date will be
postponed for a period of time, which will not extend beyond [September 30],
2005, during which the parties shall continue to discuss the Rent Factors in
good faith, and/or proceed with the confirmation of calculations as provided in
Section 3.3(a) of the Lease. In the event that Lessee does not agree to the Rent
Factors by [September 30], 2005, this Agreement shall terminate, provided that
the Lessee and Owner Participant shall each remain liable for their respective
obligations under Section 7 hereof.
|
SECTION
3. |
CONDITIONS
TO FUNDINGS |
3.1
Conditions to the Obligations of Owner Participant.
The obligations of the Owner Participant to be performed on each Funding Date
shall be subject to the fulfillment or waiver by the Owner Participant of the
conditions set forth in Sections 2.5, 2.6 and 2.7 on the Closing Date and, to
the reasonable satisfaction of the Owner Participant, the conditions precedent
set forth in this Section 3.1 on or before such Funding Date; provided,
however, that
the obligations of the Owner Participant shall not be subject to the Owner
Participant’s own performance or compliance with any agreement or
condition.
(a) Execution
and Delivery of Funding Documents.
The following documents shall have been duly authorized, executed and delivered
by the parties thereto, shall be in form and substance reasonably satisfactory
to the Owner Participant and shall be in full force and effect on such Funding
Date and a fully executed counterpart of each thereof shall have been delivered
to each party (except that (y) the original counterpart of the Funding Date
Lease Supplement bearing the Owner Trust’s signed receipt shall be delivered
only to the Owner Trust, and (z) photocopies of the Bill or Bills of Sale shall
be delivered to all parties hereto other than the Owner Trust, which shall
receive such number of original counterparts thereof as it shall reasonably
request):
(i) a Funding
Date Lease Supplement, dated such Funding Date and covering the Vehicles then
being purchased pursuant to this Participation Agreement;
(ii) an
Officer’s Certificate of the Lessee, dated such Funding Date, certifying as to,
among other things, the actions taken with respect to titling and registration
of Funding Date Vehicles, substantially in the form attached as Exhibit
A hereto;
and
(iii)
a Bill or
Bills of Sale, dated such Funding Date, and covering the Funding Date
Vehicles.
(b) Compliance
with Representations, Warranties, Etc.
The Operative Documents executed and delivered on the Closing Date shall
continue to be in full force and
Participation
Agreement
-5-
effect;
the respective representations and warranties made by the Budget Parties in the
Operative Documents (other than the Tax Indemnity Agreement) shall be true and
correct in all material respects on such Funding Date as if made on and as of
such date; no Event of Loss, Default or Event of Default shall have occurred and
be continuing or will result from the Funding on such Funding Date; all
transfer, sales, value added and similar Taxes due and payable in connection
with the acquisition and sale/leaseback of the Vehicles shall have been paid;
and each of the agreements, covenants and conditions relating to such Funding
contained in this Participation Agreement and the other Operative Documents
which are required to be performed or complied with by the Lessee, the Guarantor
or the Nominee on or before such Funding Date shall have been performed or
complied with.
(c) Other
Documents to be Delivered.
The following certificates and other documents shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in form
and substance reasonably acceptable to the Owner Participant, and an executed
counterpart of each thereof shall have been delivered to the Owner
Participant:
(i) A
certificate from each of the Lessee, the Guarantor, the Nominee and the Owner
Trust, signed by an appropriate officer thereof, confirming the accuracy and
completeness as of such Funding Date of the matters dealt with in their
respective certificates referred to in paragraphs (b), (c), (d) and (g) of
Section 2.5;
(ii) An
Officer’s Certificate, dated the Funding Date, from each of the Lessee and the
Guarantor, stating that (x) such party’s representations and warranties
contained in the Operative Documents (other than the Tax Indemnity Agreement) to
which it is a party are true and correct in all material respects on such
Funding Date, as though made on and as of such Funding Date; (y) no Default or
Event of Default has occurred and is continuing or would result from the Funding
to be made on such Funding Date; and (z) all covenants and conditions required
to be performed or fulfilled by such party on or before the Funding Date have
been performed or fulfilled; and
(iii) Either
(A) a copy of the certificate of title relating to each Funding Date Vehicle and
a copy (front and back) of a sample certificate of origin for a vehicle relating
to each Funding Date Vehicle together with the vehicle identification number for
each Funding Date Vehicle or (B) a copy (front and back) of the certificates of
origin for vehicles relating to each Funding Date Vehicle.
(d) Funding
Notice.
The Owner Trust shall have received a notice from the Lessee of such Funding in
accordance with the provisions of Section 2.3.
(e) No
Proceedings.
No action or proceeding shall have been instituted, nor shall governmental
action be overtly threatened, before any court or other Governmental Body, nor
shall any order, judgment or decree have been issued or, to the Lessee’s or
Guarantor’s actual knowledge, proposed to be issued by any court or other
Governmental Body at the time of such Funding Date, to set aside, restrain,
enjoin or prevent the execution, completion and consummation of this
Participation Agreement, the other Operative Documents or the transactions
contemplated hereby or thereby.
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Agreement
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(f) Consents.
On such Funding Date, all approvals and consents, if any, of any trustees or
holders of any indebtedness or obligations of the Lessee and the Guarantor which
are required in connection with the transactions contemplated by this
Participation Agreement and the other Operative Documents shall have been duly
obtained and shall be in full force and effect.
(g) Governmental
Actions.
All actions, if any, required to have been taken on or prior to such Funding
Date by any Governmental Body in connection with the transactions contemplated
by this Participation Agreement shall have been taken and all orders, permits,
waivers, exemptions, authorizations and approvals, if any, of such entities
required to be in effect on such Funding Date in connection with the
transactions contemplated by this Participation Agreement and the other
Operative Documents shall have been issued, and all such orders, permits,
waivers, exemptions, authorizations and approvals shall be in full force and
effect.
(h) Tax
Law Change.
There shall not have occurred a Tax Law Change since the Closing Date, if (x)
the effect of such Tax Law Change could reasonably be expected to adversely
affect the Owner Participant’s Net Economic Return and (y) the Lessee shall not
have agreed to an adjustment to Basic Rent (calculated in the manner
contemplated by Section 3.3(a) of the Lease) that would preserve such Net
Economic Return (computed on the assumption that such Tax Law Change does
adversely affect Net Economic Return).
3.2
Conditions to the Obligations of Lessee.
The obligations of the Lessee to be performed at each Funding shall be subject
to the fulfillment or waiver of the conditions precedent set forth in this
Section 3.2 on or before such Funding Date; provided,
however, that
the obligations of the Lessee shall not be subject to the Lessee’s or the
Guarantor’s own performance or compliance with any agreement or
condition.
(a) Execution
and Delivery of Funding Documents; Payment of Purchase Price.
The Owner Participant and the Owner Trust shall have complied with their
respective obligations set forth in Sections 2.1 and 2.4.
(b) Compliance
with Representations, Warranties, etc.
The Operative Documents executed and delivered at the Closing Date shall
continue to be in full force and effect; the respective representations and
warranties made by the Owner Participant and the Owner Trust pursuant to Section
4 shall be true and correct in all material respects on such Funding Date as if
made on and as of such date; and each of the agreements, covenants and
conditions relating to such Funding contained in this Participation Agreement
and the other Operative Documents which are required to be performed or complied
with by the Owner Participant or the Owner Trust on or before such Funding Date
shall have been performed or complied with. The investment by the Owner
Participant on a Funding Date shall be deemed to be a representation and
warranty by the Owner Participant that the representations and warranties set
forth in Section 4.2 are true and correct in all material respects on and as of
such Funding Date and the execution and delivery by the Owner Trust of the
Funding Date Lease Supplement dated such Funding Date shall be a representation
and warranty by the Bank and the Owner Trustee, that the representations and
warranties set forth in Section 4.3 are true and correct on and as of such
Funding Date.
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Agreement
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(c) Other
Conditions.
Each of the conditions specified in Section 3.1(e), (f) and (g) shall have been
satisfied to the satisfaction of the Lessee.
3.3
Conditions to the Obligations of Owner Trust.
The obligations of the Owner Trust to be performed at each Funding shall be
subject to the provision of notice by the Lessee in accordance with the
requirements set forth in Section 2.3 and the fulfillment or waiver of the
conditions precedent set forth in Section 3.1 (as if each reference to the Owner
Participant in Section 3.1 referred instead to the Owner Trust and each
reference to the Owner Trust referred instead to the Owner Participant);
provided,
however, that
the obligations of the Owner Trust shall not be subject to its own performance
or compliance with any agreement or conditions; and provided
further, however, that a
waiver by the Owner Participant of the conditions set forth in Sections 2.5, 2.6
and 2.7 shall be effective to bind the Owner Trust.
|
SECTION
4. |
REPRESENTATIONS,
WARRANTIES AND COVENANTS |
4.1
Representations, Warranties and Covenants of Lessee and
Guarantor.
Each of the Lessee and the Guarantor represents, warrants and covenants, to and
for the benefit of the Owner Trust and the Owner Participant, as follows (it
being understood that references in this Section 4.1 to “Operative Documents,”
“Vehicles” and “Lessor’s Estate” mean those Operative Documents delivered on or
prior to, those Vehicles purchased or to be purchased by the Owner Trust on or
prior to, and the Lessor’s Estate as it is constituted on, the date hereof or ,
with respect to each Funding Date, such Funding Date, as
applicable:
(a) Incorporation
and Good Standing.
It is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. It has all corporate power and corporate
authority to own its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. The Lessee is duly
qualified to do business as a foreign corporation and is in good standing in
each state and in each other (and the Guarantor is qualified in each) United
States jurisdiction where failure to be so qualified would reasonably be
expected to have a material adverse effect on its business or properties or on
its ability to enter into and perform its obligations under the Operative
Documents.
(b) Authorization.
It has all requisite corporate power and corporate authority to execute, deliver
and perform the Operative Documents to which it is a party and to carry out the
provisions thereof. The execution, delivery and performance by it of the
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on its part, and each Operative Document to which it
is a party has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of it, enforceable against it in accordance with
its terms, except as the same may be limited by (i) applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors’ rights and (ii) general principles of equity.
(c) Taxes.
It has filed all tax returns which are required to be filed by it (except where
the requirement to file such return is subject to a valid extension or such
failure would not reasonably be expected to have a material adverse effect on
its business and properties) and has paid or made adequate provision for the
payment of all taxes shown due on such returns (or required to be paid as a
condition to such extension), as well as all other taxes,
assess-
Participation
Agreement
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ments and governmental charges which have become due
(other than tax assessments and charges payable without penalty or which are
being contested in good faith and by appropriate proceedings and for which
adequate reserves are maintained in accordance with GAAP).
(d) No
Litigation or Default.
There are no actions, suits, investigations or proceedings pending or, to its
actual knowledge, overtly threatened against it before any Governmental Body
which question the validity or enforceability of the Operative Documents to
which it is a party or any action taken or to be taken pursuant thereto, or
which, if adversely determined, individually or in the aggregate, would
materially impair its ability to perform its obligations under the Operative
Documents to which it is a party, or which, if adversely determined,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on its financial condition or operations. It is not in
default with respect to any order of any Governmental Body, the default under
which would materially impair its ability to perform its obligations under the
Operative Documents to which it is a party or would reasonably be expected to
have a material adverse effect on its financial condition or
operations.
(e) No
Conflict.
Neither it nor any of its properties or assets are subject to any contract or
agreement, any provision of its Certificate of Incorporation or its By-Laws, or
other corporate restriction, any law or any order, rule, ruling, certificate,
license, regulation, judgment, injunction or demand of any country, state,
territory or political subdivision thereof or of any court, agency, board,
commission, governmental instrumentality or other tribunal or Governmental Body
which would reasonably be expected to have a material adverse effect on its
ability to carry on its business or perform its obligations under the Operative
Documents to which it is a party. The valid and binding execution and delivery
of, and compliance with, the Operative Documents to which it is a party (i) will
not contravene its Certificate of Incorporation or By-Laws; (ii) will not
contravene any provision of any presently effective law, rule, regulation,
decree, ruling, judgment, order or injunction applicable to or binding upon it,
the contravention of any of which would have a material adverse effect on its
business or properties or would materially impair the valid and binding nature
of, or its ability to perform, any of its obligations under the Operative
Documents to which it is a party, and (iii) will not contravene or result in the
creation or imposition of any Lien (other than any such Lien created by such
Operative Documents) on any property of it pursuant to the provisions of, result
in the acceleration of any obligation of it under, or result in a condition or
event which constitutes a default under any indenture, agreement or instrument
material to its business.
(f) Title;
Insurance.
On each Funding Date:
(i) The Bill
or Bills of Sale, when executed and delivered to the Owner Trust, will convey to
the Owner Trust all of the Lessee’s interest in each Vehicle purchased by the
Owner Trust on such Funding Date;
(ii) the
Nominee will have, as agent for and on behalf of the Owner Trust, good title to
each Vehicle purchased on such Funding Date, free and clear of all Liens (other
than Permitted Liens), provided
that the
certificate of title with respect to such Vehicle may not have been
issued;
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Agreement
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(iii) all
actions and all filings with applicable Governmental Bodies necessary to
establish and perfect the Owner Trust’s rights and interest in and to such
Vehicles (including, without limitation, title in the name of the Nominee and
the Owner Trust’s security interest reflected thereon) will have been duly made
(except that this clause (iii) shall not require that a certificate of title
shall have been issued with respect to each Vehicle purchased on the Funding
Date, provided
that all
the aforementioned actions, other than the issuance of such certificate of title
by the applicable governmental entities specified in the Officer’s Certificate
delivered pursuant to Section 3.1(a)(ii), shall otherwise have been
accomplished); and
(iv) such
Vehicles will be covered by effective insurance policies as required by Section
8 of the Lease and all premiums due on or prior to such Funding Date with
respect to such insurance policies will have been paid in full.
The use
and operation of the Vehicles by the Lessee will not, and the Lessee agrees not
to take any action which would, adversely affect the Nominee’s title to the
Vehicles or the Owner Trust’s rights or interests therein or present any
non-de
minimis risk of
forfeiture thereof or create any rights in or claims against the Vehicles (it
being understood that the Nominee’s title or the Owner Trust’s rights or
interests to the Vehicles may be subject to Permitted Liens).
(g) Financial
Statements.
In the case of the Guarantor, its audited consolidated financial statements as
of December 31, 2004
for the fiscal period then ended, a copy of which has been furnished to the
Owner Participant, have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent (except as expressly noted
therein) with that of the preceding fiscal periods and fairly present the
consolidated financial condition of it as of each date thereof, and the
consolidated results of its operations for each period then ended. Since the
date of the Guarantor’s Report on Form 10-K, dated March 1, 2005, a copy of
which has been furnished to the Owner Participant, there has been no material
adverse change in the financial condition of the Guarantor.
(h) Description
of Vehicles.
Each of the Vehicles and the improvements thereon is newly manufactured within
ninety-four (94) days of the relevant Funding Date thereof. On each Funding
Date, the information set forth in the Schedules to each Funding Date Lease
Supplement will be true and correct in all material respects for each Vehicle
covered thereby, including for each Vehicle (i) its Specific Identification and
(ii) the Purchase Price thereof.
(i) Payment
of Purchase Price.
The proceeds from the investments of the Owner Participant will be used solely
for (i) the payment (or reimbursement to the Lessee) of (i) the Purchase Price
for the Vehicles, which in all cases shall be Eligible Vehicles, acquired by the
Owner Trust on the Funding Date or (ii) payment of the Lessor’s Transaction
Costs in accordance with Section 7.1 herein.
(j) Location
of Lessee.
The “location” (as such term is defined in the U.C.C. of the State of Delaware)
of the Lessee is the State of Delaware. It will give prior notice of at least
ten (10) days to the parties hereto of any change in the foregoing or any change
in its legal name.
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Agreement
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(k) ERISA.
Assuming the truth and accuracy of the representations set forth in Section
4.2(d), the execution and delivery of the Operative Documents and consummation
of the transactions contemplated thereby do not involve any “prohibited
transaction” within the meaning of Section 406(a)(1) of ERISA or Section
4975(c)(1)(A)-(D) of the Code.
(l) Investment
Company Act.
It is not an “investment company” or an “affiliated person” of an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.
(m) Margin
Regulation.
None of the proceeds from the investment of the Owner Participant have been or
will be used directly or indirectly (i) for the purpose of purchasing or
carrying any margin security, as such term is used in Regulation U of the Board
of Governors of the Federal Reserve System, (ii) for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry any
such margin security, (iii) for any other purpose which might cause this
Participation Agreement or the obligations of the Owner Participant under the
Operative Documents to be considered a “purpose credit” within the meaning of
Regulation T, U or X of such Board of Governors or (iv) for any other purpose in
violation of Regulation T, U or X of such Board of Governors.
(n) Corporate
Existence, etc.
Subject to Section 5.4, it will at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business.
(o) Sale
of Interests.
Neither it nor anyone acting on its behalf has taken or will take any action
which will subject the issue and sale of any interest in the Lessor’s Estate to
the requirements of Section 5 of the Securities Act. Assuming the truth and
accuracy of the representations set forth in Sections 4.2(a) and 4.3(e), the
issuance, sale and delivery of the interests in the Lessor’s Estate under the
circumstances contemplated by this Participation Agreement do not require the
registration of the interests in the Lessor’s Estate under the Securities Act or
the qualification of the Trust Agreement under the Trust Indenture Act of 1939,
as amended.
(p) Consents.
Neither the nature of the Lessee nor the Guarantor, its businesses or
properties, nor any relationship between it and any other Person, is such as to
require a consent, approval or authorization of, or filing, registration,
qualification, giving of notice or the taking of any other action with respect
to any Governmental Body on its part in connection with the execution, delivery
and performance by it of the Operative Documents to which it is a party,
except
such
consents, approvals, authorizations, filings, registrations, qualifications,
notices or actions as have been obtained, filed, registered, qualified, given or
taken, as the case may be, or as to which the failure to obtain, file, register,
qualify, give or take would not (i) materially impair its ability to perform its
obligations under the Operative Documents to which it is a party, (ii) otherwise
materially impair its ability to carry on its business as presently conducted,
and it has no reason to believe that it will be prevented by any Governmental
Body, in any material respect, from so carrying on its business as presently
conducted, or (iii) result in, or increase the risk of, the imposition of any
criminal liability on any Indemnified Person.
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Agreement
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(q) Subjection
to Government Regulation.
Neither the Owner Trust nor the Owner Participant will, solely by reason of
entering into the Operative Documents or the consummation and performance of the
transactions contemplated by the Operative Documents (other than upon the
exercise of remedies under the Lease or upon expiration of the Lease if the
Owner Participant takes legal title to the Vehicles), (x) be required to qualify
to do business in any state, (y) become subject to ongoing regulation by any
Governmental Body as a manufacturer or dealer of motor vehicles in any state or
(z) to the actual knowledge of the Lessee and the Guarantor, become subject to
any other ongoing regulation of its operations by any Governmental
Body.
(r) Default.
No Default or Event of Default has occurred and is continuing.
(s) Disclosure.
Neither the Information Memorandum, the financial statements referred to in
Section 4.1(g) nor any other certificate, document, instrument or other
statement in writing furnished by it or (to its knowledge) on its behalf to the
Owner Participant in connection with the transaction contemplated hereby and by
the other Operative Documents contains any untrue statement of a material fact
or, when taken together with the other documents so furnished, omits a material
fact necessary to make the statements contained therein or herein not
misleading, under the circumstances under which any such statements have been
made.
(t) Holding
Company.
It is not subject to regulation as a “holding company,” an “affiliate” of a
“holding company,” or a “subsidiary company” of a “holding company,” within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
(u) No
Contravention of Law.
Neither the Owner Trust nor the Owner Participant, solely by reason of its
consummation of the transactions contemplated by the Operative Documents
(including the titling and registration of the Vehicles as contemplated by the
Nominee Agreement and the perfection of the Owner Trust’s security interest in
the Vehicles but excluding any discretionary acts by the Owner Trust), will
contravene, violate or breach any applicable law, rule or regulation relating to
motor vehicles, nor will such consummation of such transactions, in and of
itself, result in the creation or imposition of any Lien (other than Permitted
Liens) upon any of its property or assets under any applicable law, rule or
regulation relating to motor vehicles, or require any consent, approval or
authorization from, registration or filing with, notification to or other action
by or in respect of, any Governmental Body or other Person (except as
contemplated by the Nominee Agreement) pursuant to any applicable law, rule or
regulation relating to motor vehicles.
(v) Stock
Ownership.
The Guarantor is the beneficial owner of all of the issued and outstanding
capital stock of the Lessee, all of which capital stock has been validly issued,
is fully paid and nonassessable.
(w) Title
and Registration.
The Lessee shall take all reasonable efforts to cause each Vehicle to be titled
and registered in the State of Oklahoma, provided
that the
Lessee shall be permitted to change the state of registration of a Vehicle in
accordance with, and subject to, the conditions of Section 7.2 of the
Lease.
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Agreement
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(x) Compliance.
It is not in violation of any term of any charter instrument, by-law or, in any
material respect, any other material agreement or instrument to which it is a
party or by which it may be bound. It is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject, the
failure to comply with which would materially impair its ability to perform its
obligations under the Operative Documents to which it is a party, and has
obtained all licenses, permits, franchises and other governmental authorizations
material to the conduct of its business.
(y) Payment
of Manufacturers.
Any funds received by the Lessee from the Owner Trust pursuant to Section
2.4(ii) hereof that are not retained by the Lessee as reimbursement for any
prior payment to a Manufacturer by the Lessee shall be remitted to the relevant
Manufacturer as payment for Vehicles purchased therefrom within thirty (30) days
after receipt of such funds.
4.2
Representations, Warranties and Covenants of Owner
Participant. The
Owner Participant hereby represents, warrants and covenants, to and for the
benefit of the Owner Trust, the Lessee and the Guarantor as follows (it being
understood that references in this Section 4.2 to “Operative Documents” and
“Lessor’s Estate” mean those Operative Documents delivered on or prior to, and
the Lessor’s Estate as it is constituted on, the date hereof or any subsequent
Funding Date as of when the following representations and warranties are made
again or are required, as a condition to Funding, to be true and
correct):
(a) Securities
Act.
The interest being acquired or to be acquired by the Owner Participant in the
Lessor’s Estate is being acquired for its own account, without any view to the
distribution thereof or any interest therein, provided that the Owner
Participant shall be entitled to assign, convey or transfer its interest in
accordance with Section 9.1. The Owner Participant is an accredited investor as
that term is defined in Rule 501(a) under the Securities Act.
(b) Due
Incorporation; Execution of Documents.
The Owner Participant is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization. The Owner Participant
has all requisite power and authority to enter into and perform its obligations
under the Operative Documents to which it is a party. The execution, delivery
and performance by the Owner Participant of the Operative Documents to which it
is a party have been duly authorized by all necessary action on the part of the
Owner Participant and each Operative Document to which the Owner Participant is
a party has been duly executed and delivered by the Owner Participant and
constitutes the legal, valid and binding obligation of the Owner Participant,
enforceable against it in accordance with its terms except as enforceability may
be limited by (i) applicable bankruptcy, receivership, conservatorship,
insolvency, reorganization or similar laws affecting the enforcement of
creditors’ rights and (ii) general principles of equity.
(c) No
Liens. There
are no Owner Participant’s Liens on the Vehicles which are subject to the
Lease.
(d) Employee
Benefit Plans.
The Owner Participant is and will be making its investment hereunder, and is
performing its obligations under the Operative Documents, with its
Participation
Agreement
-13-
general
assets and not directly or indirectly with the assets of an “employee benefit
plan” (as defined in Section 3(3) of ERISA) or a “plan” (as defined in Section
4975(e) (1) of the Code).
(e) Trust
Agreement.
While the Lease is in effect, the Owner Participant hereby agrees not to amend
or modify the Trust Agreement without the prior written consent of the Lessee,
such consent not to be unreasonably withheld, provided
that if
an Event of Default shall have occurred and be continuing, the Owner Participant
may agree to amend or modify the Trust Agreement without the consent of the
Lessee, but, in such case, the Lessee shall not be liable for any indemnity
obligation that, absent this proviso, would
arise under Section 5.2 as a result of such amendment or
modification.
(f) Minimum
Liability of Lessor.
The Owner Participant represents, warrants and covenants that neither the Owner
Trust nor it has specifically utilized, directly or indirectly, as a source of
funds for the purchase of the Vehicles any amounts borrowed from (i) any
person who participated in the organization, sale, or management of the
transactions contemplated by the Operative Documents or who has an interest
(other than an interest as a creditor) in the transactions contemplated by the
Operative Documents (a “Participating Person”) or from any person who is related
to a Participating Person, (ii) any lender located outside of the United States
(if the use of such lender’s financing in the purchase of the Vehicles was
communicated by the borrower to any Participating (or related) Person) or (iii)
any lender where such loan is arranged by a Participating (or related) Person,
unless, in each case, the amount is unconditionally required to be repaid by the
Owner Participant or the Owner Trust, as the case may be, before the close of
the year in which such amount was borrowed.
4.3
Representations, Warranties and Covenants of the Bank
and the Owner
Trustee.
The Bank or, to the extent indicated below, the Owner Trustee represents,
warrants and covenants, to and for the benefit of the Lessee, the Guarantor and
the Owner Participant, as follows (it being understood that references in this
Section 4.3 to “Operative Documents” and “Lessor’s Estate” mean those Operative
Documents delivered on or prior to, and the Lessor’s Estate as it is constituted
on, the date hereof or any subsequent Funding Date as of when the following
representations and warranties are made again or are required as a condition to
Funding to be true and correct):
(a) Due
Incorporation.
It is a banking corporation validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
enter into and perform its obligations under the Operative Documents to which it
is a party.
(b) Authorization
and Execution of Documents.
The execution, delivery and performance by it or the Owner Trustee of the
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on its part. The Operative Documents to which it is,
in its individual capacity or as the Owner Trustee, a party have been duly
executed and delivered by it and constitute the legal, valid and binding
obligations of it, enforceable against it in accordance with their terms except
as enforceability may be limited by (i) applicable bankruptcy, receivership,
conservatorship, insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights and (ii) general principles of
equity.
Participation
Agreement
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(c) No
Liens.
In the case of each of the Bank, and the Owner Trustee, there are no Owner
Trustee’s Liens on the Vehicles which are subject to the Lease attributable to
it.
(d) No
Litigation.
There are no actions or proceedings pending or, to its knowledge after
reasonable inquiry, threatened against it, or the Owner Trustee, before any
Governmental Body (i) which question the validity or enforceability of the
Operative Documents to which it or the Owner Trustee, is a party; or (ii) which
relate to its banking or trust powers and which, if determined adversely to it,
would materially impair its ability to perform its obligations under the
Operative Documents to which it is a party.
(e) Sale
of Interests.
Neither it, in its individual capacity, nor anyone acting on its behalf has
directly or indirectly offered any interest in the Lessor’s Estate for sale to,
or solicited any offer to acquire any of the same from, any Person other than
the Owner Participant.
(f) No
Conflict or Required Approval.
The execution, delivery and performance by it, or the Owner Trustee, of the
Operative Documents to which it, or the Owner Trustee, is a party (i) do not
conflict with or violate any law of any Governmental Body under the laws of the
State of Delaware or the federal laws of the United States relating to its
banking or trust powers, (ii) do not require any approval of, consent, permit,
license, the giving of notice to, the registration with or the taking of any
other action by or in respect of any Governmental Body, under any law of the
State of Delaware or any federal law of the United States relating to its
banking or trust powers, except for such consents as it has obtained, and (iii)
do not conflict with, or result in any breach of any of the provisions of, or
constitute a default under its By-Laws or charter or any mortgage, indenture or
other agreement or instrument to which it is a party or by which it or its
property is bound.
4.4
Brokerage Representation.
Each party severally represents and warrants that no broker’s or finder’s fees
or commissions or management or advisory fees are, will or may become payable in
connection with the transactions contemplated by the Operative Documents, except
(i) as specifically agreed in writing by the Lessee or the Guarantor (and for
the payment of which the Lessee or the Guarantor is solely responsible); (ii) as
may be specifically provided in Schedule V hereto and (iii) or as specifically
provided in the Operative Documents.
|
SECTION
5. |
COVENANTS |
5.1
General Non-Tax Indemnification by Lessee.
(a) The Lessee shall pay, and shall indemnify, protect and save harmless each
Indemnified Person from and against all liabilities, governmental charges,
losses, obligations, claims, damages, penalties, causes of action, suits, costs,
expenses (including, without limitation, reasonable attorneys’ fees and
expenses) and judgments of any nature, incurred by, imposed upon or asserted
against any Indemnified Person in any way resulting from, related to or arising
out of (i) the Operative Documents or any transaction contemplated thereby,
including, without limitation, as a result of: (1) any Indemnified Person
failing to qualify to do business in any state or becoming subject to the
ongoing regulation by a Governmental Body if such qualification or regulation
arises solely and exclusively in connection with the transaction contemplated by
the Operative Documents or (2) the contravention, violation or breach by any
Indemnified Person of any law, rule or regulation relating to motor vehicles
that solely and exclusively results from the consummation of the
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Agreement
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transaction contemplated by the Operative
Documents, (ii) the purchase, operation, possession, ownership, use, lease,
sublease, maintenance, overhaul, repair, alteration, storage, testing,
registration, titling or failure to title or register, of any one or more of the
Vehicles, including, but not limited to, damage or claims resulting from the
presence on or under or the escape, seepage, leakage, spillage, discharge,
emission or release from the Vehicles of any Hazardous Waste, including, without
limitation, any claims asserted or arising under any Environmental Law, (iii)
the manufacture, design, sale, purchase, acceptance, revocation of acceptance,
rejection, delivery, return or conditions of the Vehicles, (iv) the Owner
Trust’s ownership or leasing hereunder of Vehicles during the term of the Lease
and thereafter while and to the extent that Vehicles are in the possession or
control or on the premises of the Lessee, any Affiliate thereof, or any
manufacturer or dealer to whom the possession or control of Vehicles has been
granted by the Lessee or the Lessor, (v) the sale of any Vehicle either to the
Lessee or any other Person pursuant to the provisions of the Lease (including
Section 11 thereof) or the Lessee’s activity as sales agent or Remarketing
Agent, or (vi) the Nominee acting as agent pursuant to the Nominee Agreement or
otherwise; provided,
however, that
the foregoing shall not apply to any liability, charge, loss, obligation, claim,
damage, penalty, cause of action, suit, cost, expense or judgment (“Costs or
Expenses”):
(A) to the
extent required to be paid by the Owner Participant pursuant to
Section 7.1;
(B) imposed on or
against an Indemnified Person or any of its Related Indemnitees to the extent
that such Costs or Expenses arise out of or are caused by (1) the gross
negligence or willful misconduct of such Indemnified Person or any of its
Related Indemnitees (other than any such gross negligence or willful misconduct
imputed to such Indemnified Person solely by reason of its interest in the
Lessor’s Estate) or (2) the inaccuracy or breach of any representation,
warranty, covenant or any undertaking contained in this Agreement or any other
Operative Document of such Indemnified Person or any of its Related Indemnitees,
unless caused by or resulting from an inaccuracy or breach by the Lessee of any
of its representations, warranties, covenants or undertakings contained in this
Agreement or any other Operative Document (other than the Tax Indemnity
Agreement);
(C) in the
case of the Owner Participant, the Owner Trust and any of their respective
Related Indemnitees, as a result of (i) a voluntary transfer or other
voluntary disposition by the Owner Participant, the Owner Trust or a Related
Indemnitee of any Vehicle or the Lessor’s Estate or any interest in the
Operative Documents other than any such transfer which occurs following the
occurrence and during the continuance of an Event of Default or (ii) an
involuntary transfer or other involuntary disposition by the Owner Participant,
the Owner Trust or a Related Indemnitee of any Vehicle or the Lessor’s Estate or
any interest in the Operative Documents in connection with any bankruptcy or
other proceeding for the relief of debtors in which such Person is the debtor or
any foreclosure by a creditor of such Person that is in each case unrelated to
the transaction contemplated hereby;
(D) to the
extent attributable to acts or events which occur during any period (except
during the exercise of
remedies pursuant to Section 11 of the Lease following the occurrence of an
Event of Default thereunder) after the expiration or earlier termination of the
Lease Term for all Vehicles and the payment by the Lessee of all amounts due and
owing under the Operative Documents and the satisfaction by the Lessee of all
its obligations under the Lease;
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(E) to the
extent that such Costs or Expenses are Taxes or Costs
or Expenses in contesting
Taxes, it being agreed that the Lessee’s liability with respect to Taxes in all
other respects is set forth in
Section 5.2 and in the Tax Indemnity Agreement;
(F) in
the case of
the Owner Participant, the Owner Trust, the Bank and any of their respective
Related Indemnitees, that would not have arisen but for the substitution of a
successor trustee under the Trust Agreement without the consent of the
Lessee;
(G) in the
case of the Owner Participant, the Owner Trust, the Bank and any of their
respective Related Indemnitees, to the extent that such Costs or Expenses arise
from an Owner Participant’s Lien or an Owner Trust’s Lien attributable to such
Person or, in the case of the Owner Participant, from an Owner Trust’s Lien
attributable to any action or inaction by the Owner Trust or the Bank in
accordance with the written instructions of the Owner Participant, unless the
Owner Participant is required to give such instructions pursuant to the
Operative Documents;
(H) to the
extent that such Costs or Expenses constitute ordinary and usual operating or
overhead expense;
(I) to the
extent such Costs or Expenses are attributable to the authorization or giving,
or withholding, by such Indemnified Person of any future amendments,
supplements, waivers or consents with respect to this Agreement and the other
Operative Documents, other than such as have been requested by the Lessee or
Guarantor or such as are required under the Operative Documents or by applicable
law or such as the Lessee has otherwise agreed to pay hereunder;
(J) with
respect to the Owner Participant and any of its Related Indemnitees, to the
extent that such Costs or Expenses are payable by the Owner Participant or
Related Indemnitee pursuant to any provision of this Agreement or any other
Operative Document expressly without any right of reimbursement from the
Lessee or that are stated not to be paid by or the responsibility of the Lessee
or are stated to be the sole cost and expense of such Person; or
(K) with
respect to the Owner Participant and any of its Related Indemnitees, to the
extent such Costs or Expenses are incurred by the Owner Participant or Related
Indemnitee and arise from or relate to compliance with regulatory requirements
of any United States governmental authority having jurisdiction over the Owner
Participant or Related Indemnitee (i) under applicable law applicable to
its business generally and which neither the Lessee nor any of its Affiliates
has directly or indirectly initiated and in which neither the Lessee nor any of
its Affiliates has participated in any way (except in either case at the
specific request of the Owner Participant or Related Indemnitee) or
(ii) under other applicable law or in other circumstances, in each case
unless such Costs or Expenses have arisen or been imposed solely as a result of
the transactions contemplated by the Operative Documents.
If any
action, suit or proceeding arising from any such Cost or Expense (other than any
such Cost or Expense for which the Lessee is not responsible pursuant to the
terms hereof) is brought against any Indemnified Person, subject to the
provisions of paragraph (b) of this Section 5.1, the Lessee will, at its
expense, assume the defense of such action, suit or
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proceeding
through counsel designated by it, which counsel shall be reasonably acceptable
to the Owner Participant, and shall have full power to litigate, compromise or
settle the same on behalf of such Indemnified Person in its sole discretion;
provided
that (x)
the Lessee shall keep such Indemnified Person fully apprised of the status of
such action, suit or proceeding and shall provide such Indemnified Person with
all information with respect to such action, suit or proceeding as such
Indemnified Person shall reasonably request, (y) such Indemnified Person, at its
own expense, may participate in any action, suit or proceeding controlled by the
Lessee and (z) no such settlement shall include an admission of an omission or
misconduct of an Indemnified Person without the prior written consent of such
Indemnified Person. In connection with any claim for indemnification hereunder
by an Indemnified Person, such Indemnified Person shall cooperate in good faith
with the Lessee. Each Indemnified Person shall be fully indemnified against all
liabilities, costs and expenses, including attorneys’ fees and expenses,
incurred in connection with any such action, suit or proceeding. The obligations
and powers of the Lessee under this Section 5.1, together with all other
indemnification obligations of the Lessee set forth in this Participation
Agreement, shall survive any termination of this Participation Agreement, the
Lease and the other Operative Documents.
(b) Notwithstanding
anything in Section 5.1(a) to the contrary, the Lessee shall not be entitled to
control and assume, or continue, the defense of, or compromise or settle, any
action, suit or proceeding if (i) an Event of Default shall have occurred and be
continuing, and the Indemnified Person notifies the Lessee that it is no longer
permitted to control or continue such defense, (ii) such action, suit or
proceeding will involve any material danger of the sale, forfeiture or loss of,
or creation of any Lien (other than a Permitted Lien) on, a material portion of
the Lessor’s Estate, (iii) in the good faith opinion of such Indemnified Person,
there exists an actual or potential material conflict of interest such that it
is advisable for such Indemnified Person to retain control of such action, suit
or proceeding, or (iv) such claim or liability involves the possibility of
criminal sanctions or liability to such Indemnified Person. In the circumstances
described in clauses (i) through (iv), the Indemnified Person shall be entitled
to control or defend such action, suit or proceeding at the expense of the
Lessee. The Lessee may in any event participate in all such actions, suits or
proceedings at its own expense. Nothing herein contained shall be deemed to
require an Indemnified Person to contest any liability, charge, loss,
obligation, claim, damage, penalty, cause of action, suit, cost, expense or
judgment or assume control of or defend any action, suit or proceeding with
respect thereto.
5.2
General Tax Indemnity.
(a) Agreement to Indemnify. Except as provided in Section 5.2(b), the Lessee
hereby assumes liability for, and agrees to timely pay and defend, indemnify and
hold harmless each Indemnified Person from and against any and all taxes, fees,
levies and assessments, including, without limitation, all license, permit or
registration fees and all income, gross receipts, rental, franchise, excise,
business, occupational, capital, value added, sales, use, ad valorem (real and
personal), property (real and personal), excise, stamp, highway use, ton
mileage, road use, fuel or other taxes, duties, imposts, withholdings of any
nature, and charges, together with any penalties, fines, additions to tax, or
interest, imposed on or with respect to any Indemnified Person, the Lessee, any
sublessee or any other Person in possession of a Vehicle, any Vehicle or any
part thereof or interest therein, by any Governmental Body or any taxing
authority therein or thereof or any foreign government, foreign governmental
subdivision, or other foreign or international taxing authority, in connection
with, upon or in any way relating to:
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(i) the
rentals, receipts or earnings, gains or revenues arising from any Vehicle or
part thereof or any interest therein, proceeds held in Trust by the Owner Trust,
or any applications or dispositions of those rentals, receipts or
revenues;
(ii) the
imposition of any Lien (or the incurrence of any liability to refund or pay over
any amount as a result of any Lien) on any Vehicle or any interest
therein;
(iii) the
Operative Documents or any amount paid or payable under or upon or with respect
to any Operative Document;
(iv) any
Vehicle or any part thereof or any interest in any thereof;
(v) the
manufacture, acquisition, construction, installation, purchase, delivery,
ownership, lease, sublease, possession, repossession, rental, use, repair,
operation, transportation, modification, rebuilding, substitution, mortgaging,
recording, documentation, acceptance, registration, rejection, abandonment,
importation, exportation, modification, maintenance, location, financing,
reoptimization, return, sale, transfer of title, replacement, storage or
disposition of any Vehicle or any part thereof or interest therein;
or
(vi) otherwise
with respect to or in connection with any transaction contemplated by the
Operative Documents (all such items herein referred to collectively as “Taxes”
or separately as a “Tax”).
(b) Taxes
Excluded From Indemnity.
The Lessee shall have no liability for the following Taxes, which are excluded
from the indemnity provided by Section 5.2(a):
(i) any Tax
on, based on, with respect to, or measured by the net or gross income (including
gross receipts) or capital of any Indemnified Person other than the Nominee
(including any franchise or conduct of business Tax or minimum Tax for tax
preferences, but excluding any Tax in the nature of sales, property, ad valorem,
service, rental, value-added, transfer, license, excise or use Taxes) imposed by
the United States or any State or political subdivision thereof; provided, that
there shall not be excluded by this clause any amounts necessary to make any
payment on an after-tax basis;
(ii) any
withholding Tax imposed by the United States federal government;
(iii) any Tax
imposed by a foreign government or a foreign or international taxing authority
(other than any such Tax imposed as a result of (A) the location, operation or
registration of any Vehicle in such jurisdiction, (B) the organization,
activities or presence in such jurisdiction of a permanent establishment or
fixed place of business of any Lessee Person, (C) the residence, nationality or
place of management and control of any Lessee Person, (D) the payment from such
jurisdiction by any Lessee Person of any amount due under the Operative
Documents or (E) any combination of factors (A)-(D); provided that
there shall not be excluded by this clause any amounts necessary to make any
payment on an after-tax basis).
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(iv) any Tax
with respect to any Vehicle or any transaction relating to such Vehicle to the
extent it covers any period beginning after the later of (A) the discharge in
full of the Lessee’s obligation to pay Rent with respect to such Vehicle or (B)
the expiration or other termination of the Lease with respect to such Vehicle to
the extent not relating to events or matters arising or occurring prior to such
discharge, expiration or termination;
(v)
any Tax
to the extent and so long as it is being resisted in accordance with Section
5.2(e), during the pendency of such resistance;
(vi) any
amount of Tax to the extent that such Tax would have been imposed on an
Indemnified Person had it not engaged in activities related to the transactions
contemplated by the Operative Documents;
(vii) any Tax
that is imposed on an Indemnified Person or any of its Affiliates, to the extent
that such Tax results from the willful misconduct or gross negligence of such
Indemnified Person or such Affiliates;
(viii)
any Tax
to the extent that it is imposed as a result of a voluntary sale, transfer,
assignment, or other voluntary disposition of any Vehicle or any part thereof or
interest therein; provided,
however, that
this paragraph shall not apply in the event that such sale, transfer, assignment
or other disposition shall occur while an Event of Default shall have occurred
and be continuing or as the result of the Lessor (or the Nominee, an Owner
Participant or any separate owner trustee or additional owner trustee acting as
agent for the Lessor) exercising any rights pursuant to Section 11 of the Lease
or with respect to the Lessor (or the Nominee, an Owner Participant or any
separate owner trustee or additional owner trustee acting as agent for the
Lessor) purchasing each Vehicle on a Funding Date and entering into the Lease or
acquiring, transferring or disposing of any Vehicle pursuant to Section 11, 12,
13 or 14 of the Lease;
(ix) any Tax
that is imposed on an Indemnified Person as a result of the involuntary transfer
by such Indemnified Person of any interest in the Operative Documents or in any
Vehicle, in any such case in or pursuant to such Indemnified Person’s bankruptcy
(other than a bankruptcy of an Owner Participant or the Lessor’s Estate caused
by an Event of Default or by the failure of the Lessee to make any payment of
Rent);
(x) any Tax
that consists of penalties, fines, additions to tax, or interest resulting from
the failure of such Indemnified Person to file returns which are timely and
proper as to matters unrelated to the transactions contemplated by the Operative
Documents, or as to any return, report or statement of such Indemnified Person
for which the Lessee is neither permitted nor required to take responsibility
under Section 5.2(c), except to the extent that such Tax results from a breach
by the Lessee of its obligations under Section 5.2(c);
(xi) any Tax
that is imposed on an Indemnified Person to the extent resulting from the breach
by such Indemnified Person (or any of its Affiliates) of any of its
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representations,
warranties or covenants in any of the Operative Documents other than this
Section 5.2;
(xii) any Tax
imposed on or with respect to any Indemnified Person that acquired an interest
in the Vehicles, the Operative Documents or the entity created pursuant to the
Trust Agreement from another Indemnified Person to the extent the Lessee
demonstrates that such Tax exceeds the amount of such Tax that would have been
imposed under law in effect on the date of transfer had there been no transfer
of such an interest in the Vehicles, the Operative Documents or the entity
created pursuant to the Trust Agreement (provided,
however, that
the Lessee shall not be required to demonstrate that such Tax is in excess of
the Tax that would have been imposed had there been no transfer unless both the
transferor and transferee agree for the benefit of the Lessee in the transfer
documentation or otherwise to reasonably cooperate with the Lessee in
determining what Taxes would have been imposed absent the transfer);
provided further that
this clause (xii) shall not apply to any amounts necessary to indemnify such
Indemnified Person on an after-tax basis pursuant to Section 5.2(f) below or in
the application of the tax benefit payback provisions thereof;
(xiii)
any Tax
imposed on or with respect to any Indemnified Person as a result of an
amendment, modification, consent or waiver to (A) the Trust Agreement or (B) any
Operative Document to which such Indemnified Person is a party without the
express written consent or written acknowledgment of the Lessee, other than in
connection with an Event of Default that has occurred and is
continuing;
(xiv)
any Tax
that is imposed against an Indemnified Person because of or in connection with
(A) claims against such Indemnified Person that are unrelated to the
transactions contemplated by the Operative Documents or (B) breaches by such
Indemnified Person (or any of its Affiliates) of any of its covenants or
representations under any of the Operative Documents to which it is a
party;
(xv) any Tax
subject to the Tax Indemnity Agreement;
(xvi) any Tax
for which the Lessee has actually and fully (including amounts described in
Section 5.2(f) hereof) paid or reimbursed, in accordance with the terms of any
Operative Document, the Indemnified Person entitled to payment under this
Section 5;
(xvii) Taxes
imposed upon an Indemnified Person by reason of such Indemnified Person not
being a United States Person;
(xviii) intangibles,
stamp or similar Taxes (other than any such Taxes imposed by a state (or any
political subdivision or taxing authority thereof or therein) as a result of
(A) the Lessee being incorporated, having its principal place of business,
or conducting activities in such state, (B) any Vehicle or part thereof being
used, registered, operated or located in such state or (C) the execution or
delivery of any Operative Document in such state);
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(xix)
Taxes
imposed upon an Indemnified Person resulting from, or that would not have been
imposed but for, the existence of Owner Participant’s Liens or Owner Trustee’s
Liens attributable to such Indemnified Person;
(xx)
Taxes
imposed with respect to the requirements of Sections 6011 or 6112 of the Code
and any Regulations thereunder; and
(xxi)
any Tax
imposed on or with respect to any Indemnified Person which results from, arises
out of, or is attributable to (i) a violation of Section 4975(c)(1)(A)-(D) of
the Code or Section 406(a) of ERISA as a result of the incorrectness of any
representation or warranty of such Indemnified Person set forth in the Operative
Documents and/or (ii) a violation of such Indemnified Person of Section
4975(c)(1)(E) or (F) of the Code or Section 406(b) of ERISA.
(c) Tax
Reporting.
As of the Closing Date, the Lessee agrees to annually deliver to the Owner
Participant a report for the Lessee’s fleet of vehicles setting forth the
distribution of rental transactions by state for each year within a reasonable
time after the close of such year for so long as such information is reasonably
available to the Lessee in the ordinary course of its business. Upon written
request of an Indemnified Person, the Lessee shall provide to such Indemnified
Person such other information as may be reasonably available to the Lessee in
the ordinary course of its business to enable such Indemnified Person to fulfill
its tax filing or other information reporting requirements with respect to the
transactions contemplated by the Operative Documents.
If any
report, return, certificate or statement is required to be filed or provided to
the Lessee by an Indemnified Person with respect to any Tax which is either
subject to indemnification under this Section 5.2 or which is the subject of an
information report specific to a Vehicle or Vehicles, then if local law or
custom requires or permits the Lessee to file or provide such report, return,
certificate or statement, in its own name or as agent of an Indemnified Person
(which agency is hereby created), and unless such Tax is required to be reported
on a return in the name of such Indemnified Person or any of its Affiliates
reporting transactions other than those contemplated by the Operative Documents,
the Lessee shall either timely file such report, return, certificate or
statement showing the Lessor as owner in the appropriate capacity or notify such
Indemnified Person of any such requirement and prepare such report, return,
certificate or statement in a timely manner as shall be reasonably satisfactory
to such Indemnified Person who shall then file or provide such report, return,
certificate or statement accordingly; provided,
however, that if
an Indemnified Person has notice that a report, return, statement, or other
information is required with respect to any such Tax other than Taxes required
to be reported on a return in the name of such Indemnified Person or any of its
Affiliates reporting transactions other than those contemplated by the Operative
Documents, or that a taxing authority has made a claim for payment of such Tax,
it shall promptly so notify the Lessee, shall furnish the Lessee with copies of
the relevant portions of all written communications from any taxing authority
relating to such Tax, and shall request such taxing authority to contact the
Lessee regarding such information relating to the transactions contemplated by
the Operative Documents; provided
further,
however, that any Indemnified Person, if requested by the Lessee (or the Lessee
if requested by an Indemnified Person), shall take reasonable steps to provide
information to, consult with, and cooperate with the Lessee
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(or the Indemnified Person, as the case may be)
regarding the manner in which any report, return or statement should be filed.
For the avoidance of doubt, the parties hereto agree that the Lessee shall be
responsible for providing sales and use tax certifications and sales and use tax
registrations required with respect to any Vehicle and that each Indemnified
Person shall cooperate in such certifications and registrations as contemplated
above. The Lessee shall, to the extent permitted by law, and based as
appropriate on information supplied by the Indemnified Person, use its best
efforts to cause all communications with respect to such Taxes (other than Taxes
required to be reported on a return in the name of such Indemnified Person or
any of its Affiliates reporting transactions other than those contemplated by
the Operative Documents) to be made directly to the Lessee, either in its own
name or as agent of the Indemnified Person (which agency is hereby created). On
request, the Lessee shall furnish such proof of payment of such Tax as is
reasonably acceptable to the Indemnified Person making such request, and the
Lessee shall furnish such information as any Indemnified Person may reasonably
require to comply with the requirements of any taxing jurisdiction.
(d) Time
for Payment of Taxes.
Except when the Lessee determines to resist payment in accordance with Section
5.2(e), the Lessee shall pay all Taxes subject to indemnification under Section
5.2(a) for which it files a return under Section 5.2(c) prior to the latest time
permitted by the relevant taxing authority for timely payment. In the case of a
Tax subject to indemnification under Section 5.2(a) for which the Lessee files a
return under Section 5.2(c), when the Lessee resists payment in accordance with
Section 5.2(e), the Lessee shall pay such Tax (in the amount finally determined
to be owing in such contest) prior to the latest time permitted by the relevant
taxing authority for timely payment after a Final Adjudication (as defined
below). In the case of a Tax subject to indemnification under Section 5.2(a) for
which the Lessee does not file a return under Section 5.2(c), the Lessee shall
pay such Tax to the appropriate Indemnified Person within 15 days after a demand
that specifies in reasonable detail the payment and the facts upon which the
right to payment is based, but not prior to the later of (i) 15 days before the
due date (ignoring extensions of time) for payment of such Tax by the
Indemnified Person, and (ii) in the case of a Tax whose payment is resisted in
accordance with Section 5.2(e), a Final Adjudication (which shall mean (A) a
decision, judgment, decree or other order by any court of competent jurisdiction
that resolves the matter, which decision, judgment, decree or other order has
become final (i.e., the
earliest of when all allowable appeals have been exhausted by either party to
the action or the time for filing such appeal has expired or such Indemnified
Person has notified the Lessee in writing that it does not intend to take such
appeal, it being understood that such Indemnified Person shall not be required
to pursue such appeal), (B) a closing agreement entered into under Section 7121
of the Code (or any successor provision) or any other settlement agreement
entered into in connection with administrative or judicial proceedings, in any
case with the Lessee’s consent, or (C) the expiration of the time for
instituting an initial suit with respect to a claimed deficiency or for
instituting a claim for refund, or, if a refund claim was filed, the expiration
of the time for instituting suit with respect thereto).
(e) Resisting
Payment.
(i) Subject
to the terms of this Section 5.2(e), the Lessee may resist payment, and require
the Indemnified Person to resist payment, of Taxes for which it must indemnify
any Indemnified Person pursuant to Section 5.2(a) by appropriate administrative
or judicial proceedings conducted in accord with the Lessee’s good faith
judgment
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and at
the Lessee’s sole expense. In the case of any such Tax that is assessed or
proposed to be assessed directly against such Indemnified Person, such
Indemnified Person shall notify the Lessee promptly of such claim and send
copies of any notice to the Lessee. Failure by an Indemnified Person to provide
such notification shall not affect the obligation of Lessee to indemnify such
Indemnified Person unless the right to pursue a contest of such claim is
effectively precluded. If the Lessee shall so request in writing within 30 days
after the receipt of such notice, such Indemnified Person shall undertake such a
contest or request (where appropriate) the Lessee to undertake such a contest
only if no Event of Default has occurred and is continuing and (A) the Lessee
shall have agreed to indemnify such Indemnified Person for any liability or loss
it might incur as a result of such contest, provided that the Lessee will not be
bound by its acknowledgment of liability if and to the extent the contest is
ultimately resolved on a basis which demonstrates that the Lessee is not
otherwise liable under this Section 5.2 with respect to such Taxes, (B) the
Lessee agrees to pay on demand all reasonable costs and expenses that such
Indemnified Person may incur in connection with such contest, including, without
limitation, attorneys’ and accountants’ fees and expenses), (C) the Indemnified
Person reasonably determines that such contest would not create a material risk
that any Vehicle or part thereof would be sold, forfeited or lost, or that a
Lien other than a Permitted Lien would be placed on such Vehicle or part thereof
or on any other property of the Owner Participant or such Indemnified Person, or
would involve the risk of imposition of a criminal penalty, (D) the Lessee
furnishes the Indemnified Person with the written opinion of counsel, selected
by such Indemnified Person and reasonably acceptable to the Lessee, that
reasonable grounds exist for contesting such Tax (or in the case of an income
tax, that the basis in law and fact in opposition to such Tax exceeds the basis
in law and fact in favor of the Tax) and (E) if such contest is to be conducted
in a manner requiring the payment of the claim, the Lessee shall pay such claim
or advance to the Indemnified Person on an interest-free basis (or on such
interest-bearing basis as the Lessee and Indemnified Person may agree upon),
with no additional after-tax cost, an amount equal to the amount of such claim.
If the Indemnified Person undertakes such contest, such Indemnified Person shall
not be obligated to pursue any appeal from an adverse judicial determination
unless such Indemnified Person shall have received a written opinion of counsel,
selected by such Indemnified Person and reasonably acceptable to the Lessee,
that it is more likely than not that such appeal would be successful and shall
in no event be obligated to appeal to the U.S. Supreme Court.
(ii) At any
time, whether before or after commencing to take the actions set forth in this
Section 5, an Indemnified Person may decline to take action with respect to any
Tax subject to indemnification hereunder by notifying the Lessee in writing that
the Lessee is relieved of its obligation to indemnify such Indemnified Person
with respect to such Tax and by repaying to the Lessee any amounts theretofore
paid or advanced by the Lessee with respect thereto (other than the expenses of
such contest). An Indemnified Person will in good faith consult with the Lessee
and its counsel regarding the conduct of any administrative or judicial contest
and will not enter into any settlement or compromise that would give rise to an
indemnifiable Tax under this Section without the Lessee’s prior written
approval, which approval shall not be unreasonably withheld or
delayed.
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(iii) Upon a
Final Adjudication of any contest in respect of which the Lessee shall have
advanced funds to an Indemnified Person, or, if earlier, upon receipt by an
Indemnified Person of a refund or credit of any amounts paid by such Indemnified
Person based on the proposed claim and in respect of which amounts the Lessee
shall have previously advanced funds to such Indemnified Person, then, to the
extent such Final Adjudication is adverse, the Lessee shall indemnify such
Indemnified Person to the extent provided by this Participation Agreement, and
promptly after such Final Adjudication (but not before the Lessee pays such
Indemnified Person the amount required by this Section 5.2), such Indemnified
Person shall repay to the Lessee the funds advanced by the Lessee, together with
any related interest received (or saved) by such Indemnified Person as a result
of such refund or credit.
(f) After-Tax
Basis.
The indemnity amounts payable under Section 5.2(a) shall be computed on an
“after-tax” basis, so that any such indemnity payment shall be in an amount
which, when reduced by the net increase in the federal, state and local income
tax liability of the Indemnified Person as a result of the receipt of such
payment, shall equal the amount of the Tax in respect of which such indemnity is
payable. Subject to the proviso to this sentence, if an Indemnified Person
actually realizes and utilizes a tax benefit by reason of the payment of a Tax
for which it is indemnified under Section 5.2(a) (including the amount of any
value-added Tax that is recoverable by such Indemnified Person, it being agreed
that each Indemnified Person will take all such actions reasonably requested by
the Lessee to facilitate the recovery or utilization of any value-added Tax
otherwise indemnifiable hereunder), such Indemnified Person shall, unless such
benefit was taken into account in the computation of the net increase, pay the
Lessee an amount equal to the lesser of (i) the sum of (A) an amount equal to
such tax benefit, plus (B) an amount equal to any other tax benefit realized and
actually utilized by such Indemnified Person as the result of any payment made
by such Indemnified Person pursuant to this sentence, and (ii) the amount of
such payment by the Lessee to such Indemnified Person plus any other payment by
the Lessee to such Indemnified Person theretofore made pursuant to this Section
5.2 reduced by other amounts previously paid by such Indemnified Person to the
Lessee pursuant to this Section 5.2; provided,
however, that an
Indemnified Person shall not be obligated to pay any portion of such amount to
the Lessee while an Event of Default shall have occurred and is continuing, and
promptly after such Event of Default shall no longer be continuing, such
Indemnified Person shall make payment to the Lessee as though such Event of
Default had not occurred. Any disallowance of a tax benefit for which the Lessee
has received a payment under this Section 5.2(f) shall be treated as a Tax for
which the Lessee is obligated to indemnify under this Section 5.2, without
regard to Section 5.2(b) (other than clause (vii) thereof).
(g) Reimbursements
by Indemnified Persons Generally.
If, for any reason, the Lessee is required to make any payment with respect to
any Taxes imposed on any Indemnified Person in respect of the transactions
contemplated by the Operative Documents or on the Vehicles, which Taxes are not
the responsibility of the Lessee with respect to such Indemnified Person under
Sections 5.2(a) and 5.2(b) hereof or the Tax Indemnity Agreement, then such
Indemnified Person shall pay to the Lessee within 30 days of the Lessee’s demand
therefor an amount which equals the amount actually paid by the Lessee with
respect to such Taxes.
Participation
Agreement
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5.3
Further Covenants of Lessee and Guarantor. Each of the Lessee and
the Guarantor hereby covenants in favor of the Owner Trust and the Owner
Participant as follows:
(a) Notice
of Default.
It will deliver to the Owner Trust and the Owner Participant promptly upon
acquiring actual knowledge of the occurrence of any Event of Default or Default,
written notice specifying the nature and period of existence thereof and what
action it is taking or proposes to take with respect thereto.
(b) Financial
Information.
The Guarantor will deliver to the Owner Participant and the Owner Trust: (i) to
the extent not readily available on the EDGAR website, http://www.sec.gov/edgar.shtml, copies
of all annual and quarterly reports sent by the Guarantor to its stockholders;
(ii) to the extent not readily available on the EDGAR website, http://www.sec.gov/edgar.shtml, copies
of all regular and periodic reports required to be filed by the Guarantor with
the Securities and Exchange Commission with respect to its securities
outstanding or to be outstanding; (iii) to the extent not readily available on
the EDGAR website, http://www.sec.gov/edgar.shtml, but in
no event less than fifty-five (55) days after the end of each of the first three
fiscal quarters of each fiscal year, the consolidated balance sheets and income
statements of the Guarantor, together with consolidated statements of cash flows
of the Guarantor for that quarter, all prepared by the Guarantor in conformity
with generally accepted accounting principles; (iv) to the extent not readily
available on the EDGAR website, http://www.sec.gov/edgar.shtml, but in
no event less than one hundred twenty (120) days after the close of each fiscal
year, a copy of the annual consolidated financial statements of the Guarantor,
consisting of consolidated balance sheets and income statements and consolidated
statements of cash flows of the Guarantor, which shall be prepared in accordance
with GAAP and certified (as to such consolidated financial statements) by any
firm of independent certified public accountants (which shall be of national
standing) regularly retained by the Guarantor; (v) not less than one hundred and
twenty (120) days after the close of each fiscal year, the certification of the
Guarantor’s chief executive officer, chief financial officer or treasurer, that
the consolidated financial statements referred to in clause (iv) above were
prepared in conformity with GAAP and that no Event of Default exists or, if an
Event of Default shall exist, specifying the nature and status thereof; and (vi)
such other information and data with respect to the Guarantor as may reasonably
be requested by the Owner Participant or the Owner Trust for the purpose of
facilitating an evaluation of the credit of the Guarantor or compliance with the
provisions of the Operative Documents.
(c) Further
Information.
Lessee shall deliver to the Owner Participant and the Owner Trust with all
reasonable promptness following request therefor (i) any information regarding
the Vehicles which it or any of its Affiliates either possesses or can acquire
without unreasonable effort or expense and (ii) all information within its
control that may be reasonably requested by such Person to enable such Person to
file any reports required to be filed by it with any Governmental Body as a
result of the transactions contemplated hereby and by the other Operative
Documents.
5.4
Merger,
Consolidation, Sale.
Lessee shall not permit or effect any consolidation of Lessee with, or merger or
liquidation (as part of a business reorganization or restructuring) of Lessee
into, any other corporation or other entity (whether or not affiliated with
Lessee), any other business combination or association involving Lessee, or
successive
Participation
Agreement
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consolidations, mergers, liquidations (as a part of a
business reorganization or restructuring) or other business combinations or
associations to which Lessee or its successor or successors shall be a party or
parties, or any sale or conveyance of the property of Lessee as an entirety or
substantially as an entirety to any other corporation or entity (whether or not
affiliated with Lessee) authorized to acquire and operate the same unless the
following conditions are satisfied: upon any such consolidation, merger,
liquidation, business combination or association, sale or conveyance, (i) the
due and punctual performance of all of the obligations of Lessee under the
Operative Documents to which it is a party shall be assumed in writing by the
corporation or other entity formed by such consolidation, or into which Lessee
shall have been merged or liquidated, or which shall have resulted from such
business combination or association, or which shall have acquired such property
(the “Surviving Entity”); (ii) either (A) the Surviving Entity shall be a
Qualified Entity or shall have all of its obligations under the Operative
Documents guaranteed by a Qualified Entity pursuant to a guaranty substantially
similar to the Guaranty or letter of credit or other form of collateral in
acceptable form to the Owner Participant, or (B) the Guaranty shall remain in
full force and effect with respect to the obligations of the Surviving Entity
under the Lease and each other Operative Document to which the Lessee had been a
party and the Guarantor shall deliver a written confirmation with respect to the
Guaranty; (iii) after giving effect to the transaction, no Event of Default or
Default shall exist; (iv) the Lessee will, if requested by the Owner
Participant, deliver to the Owner Participant an opinion or opinions of White
& Case LLP and, with respect to general corporate matters, internal counsel
to the Surviving Entity and/or successor guarantor, or any other counsel
reasonably acceptable to the Owner Participant (which opinion or opinions shall
be delivered prior to or simultaneously with the consummation of the
transaction), stating that the Surviving Entity and/or successor guarantor is
duly organized under the laws of the state or other jurisdiction of its
organization, that each such assumption agreement, new guarantee and/or
collateral agreement is duly authorized, executed and delivered and is
enforceable in accordance with its terms, that no violation of law applicable to
or binding on the Surviving Entity will result from the Surviving Entity’s
and/or successor guarantor’s being party to such assumption agreement, new
guarantee and/or collateral agreement and the Operative Documents (to the extent
provided in such assumption agreement), and that, to the extent the Guaranty is
to continue in compliance with the terms of clause (ii)(B) above, the Guaranty
has been modified to apply to the obligations of the Surviving Entity under the
Lease and other Operative Documents and that, as modified, the Guaranty is
enforceable in accordance with its terms (subject, in each case, to customary
exceptions and qualifications), and if the Surviving Entity and/or successor
Guarantor is not a United States entity, such opinions of counsel in the country
in which the Surviving Entity and/or successor Guarantor is domiciled as are
customarily required by the Owner Participant; (v) all filings and notices shall
have been made so as to perfect the interests of the Lessor and Owner
Participant in any collateral delivered pursuant to clause (ii) above, together
with satisfactory legal opinions regarding the creation and perfection of any
security interests in such collateral; and (vi) the Owner Participant shall have
received reasonably satisfactory certificates of the Surviving Entity and/or the
new guarantor with respect to incumbency, due organization, due authorization,
the representations and warranties described herein and absence of defaults. The
Lessee shall provide not less than 20 days’ prior written notice of any
transaction of the kind described in this Section 5.4 to the Lessor and the
Owner Participant which notice shall include information with respect to any
Qualified Entity which is proposed to be the Surviving Entity or a guarantor of
the Surviving Entity. Upon any such consolidation, merger or liquidation (as
part
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of a business reorganization or restructuring), or
such other business combination or association, or any sale, conveyance,
transfer or lease of substantially all the assets of the Lessee in accordance
with this Section 5.4, the Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Lessee under the Lease, and
the other Operative Documents to which the Lessee is a party.
|
SECTION
6. |
SURVIVAL
AND EFFECT OF WARRANTIES, AGREEMENTS AND
INDEMNITIES |
6.1
Survival of Agreements, Representations, Warranties and
Indemnities.
The agreements, covenants, representations, warranties and indemnities of the
parties hereto contained in this Participation Agreement and in the other
Operative Documents, and the obligations of each party in respect thereof, are
expressly made for the benefit of, and all claims of Indemnified Persons or the
Lessee, whether arising or asserted before or after expiration or termination of
the Lease, shall be enforceable by, the Indemnified Persons or the Lessee, as
the case may be, and shall survive (a) the making of the investments by the
Owner Participant; (b) the taking of title to the Vehicles by the Owner Trust or
the Nominee, acting on the Owner Trust’s behalf, and the leasing thereof to the
Lessee; (c) any investigation, statement as to the results thereof or other
action taken by or on behalf of any Indemnified Person or the Lessee; (d) the
expiration or other termination of this Participation Agreement or any other
Operative Document in accordance with the terms hereof or thereof and any waiver
of compliance with any of the terms, provisions or conditions hereof or thereof;
(e) the exercise of any remedies by the Owner Trust under the Lease or any other
Operative Document, and (f) the transfer of the Owner Participant’s or the Owner
Trust’s interest in the Lessor’s Estate, the Vehicles or the trust established
pursuant to the Trust Agreement.
6.2 Effect
of Other Indemnities.
Each of the Lessee’s obligations under the indemnities provided for in this
Participation Agreement shall be those of a primary obligor whether or not the
Indemnified Person shall also be indemnified with respect to the same matter
under the terms of the Lease or any other Operative Document, or any other
insurance, document or instrument whether or not related to the transactions
contemplated hereby, and the Person so seeking indemnification from the Lessee
may proceed directly against the Lessee without first seeking to enforce any
other right of indemnification and such Person shall thereafter, at the Lessee’s
expense, take whatever reasonable steps as the Lessee may reasonably request to
protect and preserve whatever rights of subrogation the Lessee may
have.
|
SECTION
7. |
EXPENSES |
7.1
Lessor’s Transaction Costs.
If the Closing Date shall occur as contemplated hereby, the Owner Participant
agrees to pay on each Funding Date, Lessor’s Transaction Costs in an aggregate
amount not to exceed the Transaction Cost Maximum. Such payment shall be made
promptly upon receipt of invoices with respect to such Transaction Costs,
subject to the approval thereof by the Lessee, such approval not to be
unreasonably withheld or delayed; provided, that to
the extent that invoices have been submitted, the Lessor’s Transaction Costs
indicated on Schedule V hereto shall be paid first and, thereafter, any
remaining Lessor’s Transaction Costs shall be paid to invoicing parties on a pro
rata basis with all other invoices in respect of Lessor’s Transaction Costs
which are due and remain unpaid as of such Funding Date.
Participation
Agreement
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7.2
Lessee’s Transaction Costs.
The Lessee agrees to pay all Transaction Costs for which the Owner Participant
is not responsible pursuant to Section 7.1, including Lessor’s Transaction Costs
in excess of the Transaction Cost Maximum, promptly upon receipt of invoices
with respect thereto. The Lessee shall also pay (a) costs and fees incurred in
connection with the organization and incorporation of the Nominee and with the
qualification (and the maintenance of such qualification) of the Nominee to do
business in each jurisdiction in which the Nominee shall be required to perform
its obligations under or as contemplated by the Operative Documents; (b) all
reasonable out-of-pocket costs and expenses of the Owner Trust, the Owner
Trustee and the Owner Participant in connection with the enforcement of this
Participation Agreement and the other Operative Documents and the documents and
instruments referred to herein and therein (including, without limitation, the
reasonable fees and disbursements of their counsel); (c) all reasonable fees and
out-of-pocket costs and expenses incurred by the Owner Trust and the Owner
Trustee in the establishment and maintenance of the trust pursuant to the Trust
Agreement; (d) all reasonable out-of-pocket costs and expenses of the Nominee
Trustee, the Owner Trust, the Owner Trustee and the Nominee (including
reasonable legal fees and expenses) incurred by it in connection with (i) the
entering into, or giving or withholding, of any amendments, supplements, waivers
or consents proposed by the Lessee or the Guarantor with respect to the
Operative Documents and (ii) complying with any further assurances requested
pursuant to the Operative Documents.
|
SECTION
8. |
NOTICES |
Unless
otherwise expressly specified or permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers or documents
provided or permitted by this Participation Agreement or any Operative Document
to be made, given, furnished or filed shall be in writing, by overnight courier,
or by confirmed telecopy and addressed to the addresses and for the attention of
the person set forth opposite such party’s name on Schedule III. Whenever any
notice in writing is required to be given by one party to any other party, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this
Participation Agreement.
| SECTION 9. |
TRANSFERS |
9.1
Transfers by Owner Participant.
The Owner Participant shall not assign, convey or otherwise transfer all or any
portion of its right, title or interest in, to or under any of the Operative
Documents or its interest in the trust created by the Trust Agreement without
the prior written consent of the Lessee except as expressly permitted by this
Section 9.1.
(a) Transfers
to Affiliates.
Subject to the satisfaction of the conditions set forth in this Section
9.1, the Owner Participant may make an assignment, conveyance or transfer of its
interest in the trust created by the Trust Agreement to any Affiliate of the
Owner Participant if such transferee shall have a tangible net worth not less
than $75,000,000, or such transferee’s obligations under the Operative Documents
shall have been unconditionally guaranteed by the Owner Participant pursuant to
an instrument in form and substance reasonably satisfactory to the Lessee and
the Owner Trustee; provided, that in
no event shall (1) any transfer result in there being more than the Maximum
Number of Owner Participants hereunder or (2)
Participation
Agreement
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any of the Vehicles subject to a Lease
Supplement become owned, directly or indirectly, by more than one Owner
Participant through the trust created by the Trust Agreement.
(b) Transfers
to Non-Affiliates.
Subject to the satisfaction of the conditions set forth in this Section 9.1, the
Owner Participant may make an assignment, conveyance or transfer of its interest
in the trust created by the Trust Agreement to any corporation or financial
institution which does not qualify as a transferee under the preceding paragraph
(a); provided that (x)
if and so long as no Event of Default shall have occurred and be continuing (i)
such corporation or financial institution has a tangible net worth of at least
$75,000,000 or (ii) such transferee entity’s obligations under the Operative
Documents shall have been unconditionally guaranteed by a corporation or
financial institution having a tangible net worth of at least $75,000,000 by an
instrument in form and substance reasonably satisfactory to the Lessee and the
Owner Trustee and (y) the provisions of Section 9.1(d) through (h) are satisfied
with respect to such transfer; provided, that in
no event shall (1) any transfer result in there being more than the Maximum
Number of Owner Participants hereunder or (2) any of the Vehicles subject to a
Lease Supplement become owned, directly or indirectly, by more than one Owner
Participant through the trust created by the Trust Agreement.
(c) Transfer
With Consent.
Any transfer other than one satisfying the requirements set forth in paragraph
(a) or (b) of this Section 9.1 may only be made with the prior written consent
of the Lessee, which consent may not be unreasonably withheld or
delayed.
(d) Required
Notice and Effective Date.
If the Owner Participant shall propose to make a transfer it shall give written
notice of such proposed transfer to the parties hereto at least fifteen (15)
days in the case of any transfer pursuant to paragraph (b) of this Section 9.1
(or five (5) Business Days in the case of any transfer pursuant to paragraph (a)
of this Section 9.1) prior to such proposed transfer, setting forth the name of
such proposed transferee, the percentage or interest to be retained by the Owner
Participant, if any, and the date on which such transfer is proposed to become
effective. All reasonable out-of-pocket costs incurred by the Lessee, the Owner
Trustee or the Owner Trust in connection with any disposition by the Owner
Participant under this Section 9.1 shall be borne by the Owner Participant. In
the event of a transfer under this Section 9.1, any expenses incurred by the
transferee in connection with its review of the Operative Documents and its
investigation of the transactions contemplated thereby shall be borne by such
transferee or the Owner Participant and shall not be considered costs and
expenses which the Lessee is obligated to pay or reimburse under Section
7.2.
(e) Assumption
of Obligations.
Any transferee pursuant to this Section 9.1 shall assume and agree in writing to
be bound by all obligations (whether or not yet accrued) under and become a
party to this Participation Agreement and all other Operative Documents to which
its transferor was a party, and thereupon the obligations of the Owner
Participant under the Operative Documents shall be released and reduced to the
extent of such transfer, provided
that the
transferor Owner Participant shall not be released from the obligation to remove
all Owner Participant’s Liens attributable to it. Any such transferee will, if
requested by the Lessee, deliver to the Lessee, the Bank and the Guarantor an
opinion or opinions of counsel as may be requested by the Lessee and in form and
substance reasonably satisfactory to the Lessee (which opinion or opinions shall
be delivered prior to or simultaneously with the consummation of the transaction
and be subject to customary qualifications) stating that such transferee and
other
Participation
Agreement
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party to
an assumption instrument is duly organized under the laws of the state or other
jurisdiction of its organization, that each of the assumption instrument and any
guarantee delivered pursuant to this Section 9 is duly authorized, executed and
delivered by the parties thereto and is enforceable in accordance with its
terms, and that no violation of law applicable to or binding on such transferee
or any guarantor will result from such transferee’s or guarantor’s being party
to such assumption instrument or guarantee and the Operative Documents (to the
extent provided in such assumption instrument). Upon any such transfer as above
provided, the transferee shall be deemed the “Owner Participant” for all
purposes of the Operative Documents and shall be deemed to have made the
payments pursuant to Section 2.1 previously made by the transferor represented
by the interest being conveyed; and each reference herein and in the other
Operative Documents to the “Owner Participant” shall thereafter be deemed a
reference to the transferee for all purposes; provided,
however, that in
no event shall the Lessee’s obligations under the Operative Documents be more
burdensome or costly in any material respect than they would have been but for
such transfer. Upon any such transfer, the Owner Participant shall deliver to
the Owner Trust and the Lessee, new Schedules I and III, revised to reflect the
relevant information for such new Owner Participant.
(f) [Reserved].
(g) Representations
and Warranties.
Notwithstanding anything to the contrary set forth above, the Owner Participant
may not assign, convey or transfer its interest to any Person, unless such
Person shall have delivered to the Owner Trust and the Lessee a certificate
confirming the accuracy in all material respects of the representations and
warranties set forth in Section 4.2 with respect to such Person (other than as
such representation or warranty relates to the execution and delivery of
Operative Documents).
(h) Competitors.
Notwithstanding anything in this Participation Agreement to the contrary, except
in connection with a transfer pursuant to Section 9.1(c), under no circumstances
shall the Owner Participant transfer all or any portion of its right, title or
interest in, to or under any of the Operative Documents or its interest in the
trust created by the Trust Agreement to any Person who, in the good faith
judgment of the Lessee or the Guarantor, is a direct competitor of the Lessee or
any Affiliate thereof engaged primarily in the car or truck rental business
(other than any assignee who is engaged in such business solely as lessor,
similar to the position of Owner Trust under the Lease), or has an Adverse
Business Relationship with the Guarantor, the Lessee or any Affiliate thereof or
which is an Affiliate (or any entity of which such Person, or any of its
Affiliates, owns, directly or indirectly, 5% or more of the voting stock) of
such a competitor.
9.2
Transfers by Owner Trust.
The Owner Trust shall not, and the Owner Participant shall not permit the Owner
Trust to, without the prior written consent of the Lessee, assign, convey or
otherwise transfer all or any part of its right, title or interest under the
Operative Documents or its interest in the Lessor’s Estate except as permitted
by the Lease, provided
that,
anything herein to the contrary notwithstanding, a successor or additional Owner
Trustee may be appointed pursuant to Section 9.1 of the Trust Agreement if such
successor Owner Trustee is not a Person with whom, in the good faith judgment of
the Lessee or the Guarantor, the Lessee or the Guarantor has an Adverse Business
Relationship.
Participation
Agreement
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|
SECTION
10. |
CERTAIN
COVENANTS OF OWNER TRUST AND OWNER
PARTICIPANT |
10.1
Certain Covenants of Owner Participant.
The Owner Participant agrees with the Lessee and the Owner Trust that (i) except
as specifically provided in Article VIII of the Trust Agreement, the Owner
Participant will not terminate or revoke the trust created by the Trust
Agreement during the term of the Lease and will not pledge, assign or otherwise
transfer all or any portion of its right, title and interest in, to or under the
Trust Agreement or such trust except in accordance with Section 9; (ii) the
Owner Participant will not, directly or indirectly, create or suffer or permit
to be created or to exist any Owner Participant’s Lien (and it will promptly
remove, discharge or bond or cause to be removed, discharged or bonded, at its
own expense any such Lien); (iii) the Owner Participant will not instruct the
Owner Trustee to take any action, on behalf of the Owner Trust, or make any
omission which would constitute a breach of any of the Owner Trust’s obligations
under the Operative Documents, and the Owner Participant shall provide the Owner
Trustee with such instructions and confirmations as the Owner Trustee may from
time to time request in order to authorize the Owner Trustee (or to confirm its
authority) to take or refrain from taking actions, on behalf of the Owner Trust,
as required under the Operative Documents (it being understood that nothing in
this clause (iii) shall be deemed to condition the Owner Trust’s obligations
under the Operative Documents).
10.2
No Creation of Owner Trustee’s Liens by the
Bank.
The Bank agrees that it will not, directly or indirectly, create or suffer or
permit to be created or to exist and that it will, at its own expense, promptly
remove, discharge or bond or cause to be removed, discharged or bonded any Owner
Trustee’s Liens attributable to it in its individual capacity. The obligations
of the Bank under this Section 10.2 with respect to any Lien resulting from a
claim arising prior to the termination of the Lease shall survive such
termination.
|
SECTION
11. |
CONFIDENTIALITY |
(a) The Owner
Participant and the Owner Trust each agrees that it will maintain, and cause its
Affiliates to maintain, the confidentiality of any written information
identified as confidential (provided that any of the pricing information
provided in connection with the transaction contemplated by the Operative
Documents shall be deemed confidential) provided by the Lessee, the Guarantor or
any Affiliate thereof (whether such information is provided in connection with
any provision of this Participation Agreement or any other Operative Document),
including the provisions of the Operative Documents which are specific to the
Lessee’s or the Guarantor’s business and any information contained in any
appraisal conducted pursuant to the Operative Documents (all of the foregoing,
the “Protected Information”), so long as the Protected Information is not or
does not become publicly available and is not otherwise provided to such Person
by or on behalf of the Lessee, the Guarantor or any Affiliate thereof on a
nonconfidential basis or by any other Person; provided,
however, that
the Owner Participant or the Owner Trust may disclose the Protected Information
(a) to any Affiliate or employee, (b) to its lawyers, accountants and financial,
insurance and other independent advisors so long as the individuals principally
responsible for the matter for which such information was disclosed are advised
of the confidential nature of the Protected Information and requested to observe
the provisions of this Section 11, (c) if, in its reasonable opinion, such
disclosure is necessary under applicable law or under any order of a
Governmental Body, or pursuant to a requirement of any
Participation
Agreement
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taxing agency, or under the rules and regulations of
any national securities exchange on which the shares of the Owner Participant or
the Owner Trustee are listed or required by bank regulatory, other
administrative officials or the National Association of Insurance Commissioners
in connection with the exercise of their regulatory or administrative powers,
(d) in connection with the exercise of its rights and remedies hereunder and
under the Lease if an Event of Default shall have occurred and be continuing,
(e) if it has provided ten (10) days prior written notice to the Lessee, to
prospective transferees pursuant to Section 9 if such Persons agree, in a
writing delivered to the Lessee, to be bound by the provisions of this Section
11 (provided that no advance notice to the Lessee shall be required for the
disclosure of pricing information provided in connection with the transaction
contemplated by the Operative Documents otherwise deemed confidential for
purposes of this paragraph so long as the prospective transferee has agreed to
keep such information confidential), (f) in response to any subpoena or other
legal process and (g) as otherwise required by any Operative
Document.
(b) Notwithstanding
anything contained in this Participation Agreement or in any other document,
agreement or understanding relating to the transactions contemplated by this
Participation Agreement, each party (and each employee, representative, or other
agent of such party) is authorized to disclose to any and all persons, beginning
immediately upon commencement of discussions regarding the transactions
contemplated by this Participation Agreement, and without limitation of any
kind, the U.S. federal, state or local tax treatment and tax structure of such
transactions, and all materials of any kind (including opinions or other tax
analyses) that are provided to such party (or any employee, representative, or
other agent of such party) relating to such tax treatment and tax
structure. For
purposes of this authorization, the “tax treatment” of a transaction means the
purported or claimed tax treatment of the transaction, and the “tax structure”
of a transaction means any fact that may be relevant to understanding the
purported or claimed tax treatment of the transaction. None of the parties to
the transactions contemplated by this Participation Agreement provides U.S.
tax
advice, and each party should consult its own advisors regarding its
participation in the transactions
contemplated by this Participation Agreement.
|
SECTION
12. |
LESSEE’S
RIGHT OF QUIET ENJOYMENT; OWNERSHIP FOR FEDERAL TAX
PURPOSES |
(a) Each
party to this Participation Agreement expressly agrees that, notwithstanding any
other provision of any of the Operative Documents, so long as no Event of
Default shall have occurred and be continuing, it will not take or cause or
authorize any other Person to take any affirmative action to prevent the Lessee
from having quiet and peaceable possession and enjoyment of each Vehicle during
the Lease Term except in accordance with the provisions of the
Lease.
(b) Each of
the Lessee, the Owner Participant and the Owner Trust expressly agree (i) that
for United States federal, state and local income tax purposes, the Owner
Participant is intended to be the owner of all Vehicles and the Lessee is
intended to be the lessee thereof and (ii) that it will not take any position
inconsistent with the foregoing clause (i) in any federal, state or local tax
return, filing or proceeding.
Participation
Agreement
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| SECTION 13. |
MISCELLANEOUS |
(a) Entire
Agreement.
This Participation Agreement and the other Operative Documents express the
entire understanding of the parties relating to the subject matter hereof and
thereof; all prior understandings, written or oral, with respect to such subject
matter are hereby merged herein and superseded.
(b) Severability.
If any provision of an Operative Document, or the application thereof to any
Person or circumstance, shall, for any reason or to any extent, be invalid or
unenforceable, such invalidity or unenforceability shall not in any manner
affect or render invalid or unenforceable the remainder of such or any other
Operative Document, and the application of that provision to other Persons or
circumstances or in other jurisdictions shall not be affected.
(c) Successors
and Assigns.
Subject to Section 9, the terms and provisions of the Operative Documents
shall be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns except that no party hereto may
assign its rights under this Participation Agreement or any other Operative
Document except as expressly provided herein or therein.
(d) Counterparts.
This Participation Agreement and any amendment, modification, waiver or
supplement hereto may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
for all purposes, but all such counterparts shall together constitute but one
and the same instrument.
(e) Construction.
The section and paragraph headings in this Participation Agreement and the table
of contents hereof are for convenience of reference only and shall neither be
deemed to be a part of this Participation Agreement nor modify, define, expand
or limit any of the terms or provisions hereof. All references herein to
numbered or lettered sections, appendices, schedules and exhibits, unless
otherwise indicated, are to sections, appendices, schedules and exhibits to this
Participation Agreement. Words and definitions in the singular shall be read and
construed as though in the plural and vice
versa, and
words in the masculine, neuter or feminine gender shall also be read and
construed as though in either of the other genders.
(f) Owner
Trust’s Capacity; No Recourse; Corporate Capacity.
(i) This
Participation Agreement and the other Operative Documents to which the Owner
Trust is a party are, except as expressly provided herein or therein, being
entered into by the Bank not individually but as the Owner Trustee under the
Trust Agreement, in exercise of the power and authority conferred upon and
invested in the Owner Trustee by the Trust Agreement and this Participation
Agreement, and it is expressly understood and agreed that nothing in this
Participation Agreement or such other Operative Documents shall be construed as
creating any liability (other than for willful misconduct or gross negligence)
of the Bank individually to pay any sum or to perform any covenant, either
express or implied, in this Participation Agreement or such other Operative
Documents (all such liability, if any, being expressly waived by
the
Participation
Agreement
-34-
parties
hereto) and that each party hereto, on behalf of itself and its successors and
assigns, agrees in the case of any liability of the Bank hereunder or thereunder
(except for such liability attributable to its willful misconduct or gross
negligence) that it will look solely to the assets of the Lessor’s Estate and of
the trust created by the Trust Agreement; provided,
however, that
the Bank in its individual capacity shall in any event be liable with respect to
(A) the removal of the Lessor’s Liens resulting from claims against or acts or
breaches by the Owner Trustee in each case in its individual capacity or
involving its gross negligence or willful misconduct or (B) breaches of Section
4.3 in its individual capacity and as provided in Section 18.10 of the Lease;
provided
further, that
the foregoing exculpations of the Owner Trustee shall not be deemed to be
exculpations of any other Person.
(ii) The
Lessee and the Owner Participant are entitled to presume, without any inquiry,
and without regard to their knowledge of the contents of the Trust Agreement,
that the Owner Trustee has the authority to take any action purportedly taken in
its capacity as the Owner Trustee, unless and until the Owner Participant
notifies such Person that it has instructed the Owner Trustee not to take such
action (in which case such Persons shall be entitled to presume, without any
inquiry, that the Owner Trustee lacks such authority with respect to such action
unless and until notified to the contrary by the Owner Participant); it being
understood that in the event that the Owner Trustee takes any action as to which
any such Person is entitled to assume the Owner Trustee’s authority, but as to
which the Owner Trustee lacks actual authority, the Owner Participant’s sole
recourse shall be to the Owner Trustee, and such lack of actual authority shall
not affect the rights and interests of the Lessee and the Owner Participant. Any
obligations of the Owner Trustee may be performed on its behalf by the Owner
Participant and such performance shall not be construed as a revocation of the
trust created by the Trust Agreement. Neither the Owner Trustee nor the Owner
Participant shall have any obligation or duty to the Lessee or to others with
respect to the transactions contemplated hereby, except those obligations or
duties expressly set forth in this Participation Agreement and the other
Operative Documents; and (i) the Owner Trustee shall not be liable for
performance by the Owner Participant of its obligations or duties hereunder,
(ii) the Owner Participant shall not be liable for performance by the Owner
Trustee of its obligations or duties hereunder, and (iii) neither the Owner
Trustee nor the Owner Participant shall be liable for performance by the Lessee
or the Guarantor of such party’s obligations or duties hereunder. Without
limiting the generality of the foregoing, under no circumstances whatsoever
shall the Owner Participant be liable to the Lessee for any action or inaction
on the part of the Owner Trustee in connection with the transactions
contemplated herein or in any other Operative Document, whether or not such
action or inaction is caused by willful misconduct or negligence of the Owner
Trustee.
(g) Further
Assurances.
Each of the parties hereto agrees to take all such further action, and to
execute and deliver all such further documents or instruments as any other party
hereto may reasonably request in order to carry out the intent of this
Participation Agreement and the other Operative Documents and to consummate the
transactions contemplated hereby and thereby.
Participation
Agreement
-35-
(h) Governing
Law.
This Participation Agreement shall be governed by, construed and enforced in all
respects in accordance with the law of the State of New York.
(i) Mandatory
Counterclaims. I f the
Lessee or the Guarantor refrains, as required by the Operative Documents, from
asserting a claim against the Owner Trust or the Owner Participant in an action
in which, under applicable law, such claim would have been a mandatory
counterclaim, the other parties to this Participation Agreement agree that the
Lessee or the Guarantor shall not be deemed to have waived such claim (if
asserted in an independent action) by virtue of its not having been asserted as
a counterclaim.
(j) Amendment
or Waiver.
Neither this Participation Agreement nor any other Operative Document nor
any terms hereof or thereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in writing signed by the
parties hereto.
(k) Variations
on Schedule.
Each of the parties hereto agree that Schedule
VI hereto
contains certain terms and conditions applicable to this Agreement and the other
Operative Documents which have been agreed by the parties hereto. To the extent
that such terms and conditions are different from, or in conflict with, other
terms and conditions of the Operative Documents, the terms and conditions
indicated on Schedule
VI shall
control.
(l) Forum
Selection and Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES
HERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
NEW YORK LOCATED IN NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY VEHICLE OR OTHER PROPERTY MAY BE
BROUGHT, AT THE OWNER TRUST’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SUCH VEHICLE OR OTHER PROPERTY MAY BE FOUND OR REGISTERED OR TITLED. THE LESSEE
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE LESSEE FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
LESSEE HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE LESSEE HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT
Participation
Agreement
-36-
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE LESSEE HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER OPERATIVE DOCUMENTS.
(m) Waiver
of Jury Trial.
THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THE
LESSEE ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER
OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE OWNER TRUST’S AND THE OWNER PARTICIPANT’S ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
Participation
Agreement
-37-
IN
WITNESS WHEREOF, the parties hereto have each caused this Participation
Agreement to be duly executed as of the day and year first above
written.
|
BUDGET
RENT A CAR SYSTEM, INC., as Lessee | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
BRAC
TRUST No. 2005-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (BRAC Trust No.
2005-[ ]) | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
WILMINGTON
TRUST COMPANY, in its individual capacity only to the extent expressly
stated herein and otherwise solely in its capacity as Owner Trustee under
the Trust Agreement (BRAC Trust No. 2005-[ ]), | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
CENDANT
CORPORATION, as Guarantor | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
[OWNER
PARTICIPANT], as Owner Participant | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Participation
Agreement
-38-
|
SCHEDULE
I | |
|
to | |
|
Participation
Agreement |
SCHEDULE
OF ACCOUNTS
|
Lessee |
|
|
Bank
Name: |
|
|
ABA
Number: |
|
|
Account
Name: |
Budget
Rent A Car System, Inc. |
|
Account
Number: |
|
|
Owner
Trust |
|
|
Bank
Name: |
Wilmington
Trust Company |
|
ABA
Number: |
|
|
Account
Name: |
BRAC
Trust No. 2005-[ ] |
|
Account
Number: |
|
|
Attention:
Tira Johnson | |
|
Owner
Participant |
|
|
Bank
Name: |
|
|
ABA
Number: |
|
|
Acct
Name: |
|
|
Acct
Number: |
|
|
Ref: |
|
Participation
Agreement
|
SCHEDULE
II | |
|
to | |
|
Participation
Agreement |
U.C.C.
FILINGS BEING MADE ON CLOSING DATE
|
1. |
Uniform
Commercial Code filings naming Lessee as debtor and Owner Trust as secured
party in the following jurisdictions: |
|
a) |
State
of Delaware, Secretary of State |
Participation
Agreement
|
SCHEDULE
III | |
|
to | |
|
Participation
Agreement |
PARTIES
Lessee
Budget
Rent A Car System, Inc.
6 Sylvan
Way
Parsippany,
NJ 07054
Attention:
President
Telecopier
No.: (973) 496-7460
Telephone
No.: (973) 496-5008
Owner
Trust
BRAC
Trust No. 2005-[ ]
c/o
Wilmington Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890-0001
Attention:
Corporate Trust Administration
Telecopier
No. (302) 636-4140
Telephone
No. (302) 631-1000
Owner
Trustee
Wilmington
Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890-0001
Attention:
Corporate Trust Administration
Telecopier
No. (302) 636-4140
Telephone
No. (302) 631-1000
Nominee
Budget
Truck Trust I
c/o
Wilmington Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890-0001
Attention:
Corporate Trust Administration
Telecopier
No. (302) 636-4140
Telephone
No. (302) 631-1000
Participation
Agreement
SCHEDULE
III
Page
2
Guarantor
Cendant
Corporation
1 Campus
Drive
Parsippany,
NJ 07054
Attention:
Treasurer
Telecopier
No.: (973) 496-5852
Telephone
No.: (973) 496-7938
Owner
Participant
Participation
Agreement
|
SCHEDULE
IV | |
|
to | |
|
Participation
Agreement |
ELIGIBLE
VEHICLES
|
Count |
Truck
Completion Date |
Make |
Vehicle
Type |
Model |
VIN
Number |
Unit
Number |
Box
Length |
Chassis
PO Number |
Purchase
Price |
Participation
Agreement
|
SCHEDULE
V |
TRANSACTION
COSTS
Wilmington
Trust Company
Richards,
Layton & Finger, P.A.
Marshall
& Stevens, Inc.
Thelen
Reid & Priest LLP
Participation
Agreement
|
SCHEDULE
VI |
VARIATIONS
Participation
Agreement
|
EXHIBIT
A | |
|
to | |
|
Participation
Agreement |
FORM OF
SECTION 3.1(a)(ii)
OFFICER’S
CERTIFICATE
The
undersigned, ______________, the ______________ of BUDGET RENT A CAR SYSTEM,
INC., a Delaware corporation (the “Company”), hereby refers to Section 3.l
(a)(ii) of the Participation Agreement (BRAC Trust No. 2005-[ ]), dated as of
May [ ], 2005 (the “Participation Agreement”), among the Company, BRAC Trust No.
2005-[ ], as Owner Trust, Wilmington Trust Company, acting in its individual
capacity only to the extent expressly stated therein and otherwise solely in its
capacity as Owner Trustee under the Trust Agreement, as Owner Trustee, Cendant
Corporation, as Guarantor and [OWNER PARTICIPANT], as Owner Participant, and
hereby certifies that as of the date hereof:
1. The
Eligible Vehicles being transferred to the Owner Trust on the date hereof
pursuant to the Bill of Sale and being subjected to the Lease (the “Vehicles”)
are identified in Schedule I attached hereto which sets forth, with respect to
each such Vehicle, the information referred to in clause (a) of Section 7.1 of
the Lease;
2. With
respect to the transfer of title to each Vehicle:
(a) the
Company has taken or caused to be taken the steps necessary to complete the
action set forth in Annex A hereto, in the State of Oklahoma;
(b) all
required fees and charges under the relevant state motor vehicle statute have
been remitted or caused to be remitted to the relevant state
agency;
(c) all
applicable taxes required to be paid have been paid or caused to be paid;
and
(d) such
Vehicle has been or is being registered, in the State of Oklahoma, in the name
of either the Lessee or the Nominee and the Lessor is or will be designated as a
secured party on the certificate of title for such Vehicle;
3. Each
Vehicle is free and clear of all Liens other than Permitted Liens;
and
4. All
required odometer mileage disclosures with respect to the transfer of title to
each Vehicle to the Nominee have been properly disclosed to the Nominee on the
form prescribed by the applicable state.
All
capitalized terms used herein not otherwise defined herein shall have the
meanings assigned to such terms in Appendix A to the Participation
Agreement.
Participation
Agreement
EXHIBIT
A
Page
2
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this ____ day of
______________, 2005.
|
BUDGET
RENT A CAR SYSTEM, INC. | |
|
| |
|
Name: | |
|
Title: |
Participation
Agreement
|
SCHEDULE
I | |
|
to | |
|
Officer's
Certificate |
DESCRIPTION
OF VEHICLES
|
Count |
Expected
Truck Completion
Date |
Make |
Model |
V.I.N.
Number |
Unit
Number |
Vehicle
Type |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Participation
Agreement
|
ANNEX
A | |
|
to | |
|
Officer's
Certificate |
Actions
taken with respect to transfer of title for Vehicles
Participation
Agreement
|
EXHIBIT
B-1 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Special Counsel for the Lessee and Guarantor]
Participation
Agreement
|
EXHIBIT
B-2 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Corporate Counsel for Lessee]
Participation
Agreement
|
EXHIBIT
B-3 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Corporate Counsel for Guarantor]
Participation
Agreement
|
EXHIBIT
B-4-A | |
|
to | |
|
Participation
Agreement |
[Form of
Closing Date Opinion of Richards, Layton and Finger, P.A.,
Special
Counsel for the Owner Trust]
Participation
Agreement
|
EXHIBIT
B-4-B | |
|
to | |
|
Participation
Agreement |
[Form of
Closing Date Opinion of Richards, Layton and Finger, P.A.,
Special
Counsel for the Owner Trustee]
Participation
Agreement
|
EXHIBIT
B-5 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Special Counsel for the Owner Participant]
Participation
Agreement
|
EXHIBIT
B-6 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Corporate Counsel to the Owner Participant]
Participation
Agreement
|
EXHIBIT
B-7 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Special Counsel for the Nominee]
Participation
Agreement
|
EXHIBIT
B-8 | |
|
to | |
|
Participation
Agreement |
[Form of
Closing Date Opinion of Oklahoma Counsel]
Participation
Agreement
|
EXHIBIT
C-1 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of Nominee]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of Budget Truck Trust I, a Delaware
statutory trust (the “Nominee”) under the Nominee Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005 (as amended, modified and supplemented from
time to time, the “Nominee Agreement”), among the Nominee, the Lessor (as such
term is defined in Appendix A to the Participation Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005, among BRAC Trust No. 2005-[ ], as Owner
Trust, Wilmington Trust Company, acting in its individual capacity only to the
extent expressly stated therein and otherwise solely in its capacity as Owner
Trustee under the Trust Agreement, as Owner Trustee, Budget Rent A Car System,
Inc., as Lessee, Cendant Corporation, as Guarantor and the Owner Participant
named therein; capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in such Appendix A), duly authorized for the
purpose, acting on behalf of the Nominee, hereby make, constitute and appoint
(so long as no Event of Default shall have occurred and be continuing) as the
Nominee’s attorney-in-fact (i) the Lessee, acting through any of its “District
Managers”, “City Managers”, “Fleet Managers” or “Turn-back Managers” or (ii) the
Guarantor, acting through any of its duly authorized representatives, on behalf
of the Nominee and in its name, place and stead, for the special purpose of (1)
doing all things necessary, including, without limitation, executing any
documents in the name of the Nominee, to (a) properly register or reregister
when necessary under applicable law the Lessor’s Vehicles in the State of
Oklahoma or such other state permitted by Section 7.2 of the Lease, in the name
of the Nominee or of the Lessee (for those states in which, in the Lessee’s
reasonable opinion, Vehicles must be registered in the name of the Lessee for
insurance, tax or other regulatory purposes) and (b) obtain certificates of
title in the name of the Nominee for the Vehicles, (2) recording liens in favor
of the Owner Trust on the certificate of title of any Vehicle (or of any
Eligible Vehicle which will be subjected to the Lease), (3) executing such other
documents as are necessary in order to record liens on such Vehicles (or
Eligible Vehicles) in favor of the Owner Trust, (4) receiving (by mail or in
person) and forwarding to the Nominee or its agent the certificate of title and
other registration documentation relating to such Vehicles (or Eligible
Vehicles), (5) designating the Lessee as the mailing address of the Nominee for
all documentation relating to the title and registration of such Vehicles (or
Eligible Vehicles) and (6) applying for duplicate certificates of title
indicating the lien of the Owner Trust on such Vehicles (or Eligible Vehicles)
where original certificates of title have been lost or destroyed. This power of
attorney shall terminate on such date, after the first Funding Date, that the
Remarketing Termination Date shall have occurred or that no Vehicles shall
remain subject to the Lease, and is irrevocable until such date so long as no
Event of Default shall have occurred and be continuing.
Participation
Agreement
EXHIBIT
C-1
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
Budget
Truck Trust I, by Wilmington Trust Company, not in its individual capacity
but solely as trustee under the Trust Agreement (BRAC Trust No. 2005-[
]) | ||
|
as
Nominee | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
C-2 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of Owner Trust]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of BRAC Trust No. 2005-[ ], a Delaware
statutory trust, as Owner Trust (in such capacity, the “Owner Trust”) under the
Trust Agreement (BRAC Trust No. 2005-[ ]), dated as of May [ ], 2005 (as
amended, modified and supplemented from time to time, the “Trust Agreement”)
among Wilmington Trust Company, as Owner Trustee, and the Owner Participant (as
such term is defined in Appendix A to the Participation Agreement (BRAC Trust
No. 2005-[ ]), dated as of May [ ], 2005 (the “Participation Agreement”), among
the Owner Trust, Wilmington Trust Company, acting in its individual capacity
only to the extent expressly stated therein and otherwise solely in its capacity
as Owner Trustee under the Trust Agreement, as Owner Trustee, Budget Rent A Car
System, Inc., as Lessee, Cendant Corporation, as Guarantor and the Owner
Participant named therein; capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in such Appendix A), duly authorized
for the purpose, acting on behalf of the Owner Trust, hereby make, constitute
and appoint (so long as no Event of Default shall have occurred and be
continuing) as the Owner Trust’s attorney-in-fact (i) the Lessee, acting through
any of its “District Managers”, “City Managers”, “Fleet Managers” or “Turn-back
Managers” or (ii) the Guarantor, acting through any of its duly authorized
representatives, on behalf of the Owner Trust and in its name, place and stead,
for the special purpose of (1) recording liens in favor of the Owner Trust on
the certificate of title of any Vehicle (or of any Eligible Vehicle which will
be subjected to the Lease), (2) executing such other documents as are necessary
in order to record liens on such Vehicles (or Eligible Vehicles) in favor of the
Owner Trust, (3) receiving (by mail or in person) and forwarding to the Nominee
or its agent on behalf of the Owner Trust, the certificate of title and other
registration documentation relating to such Vehicles (or Eligible Vehicles) and
(4) designating the Lessee as the mailing address of the Owner Trust for all
documentation relating to the title and registration of such Vehicles (or
Eligible Vehicles). This power of attorney shall terminate on such date, after
the first Funding Date, that the Remarketing Termination Date shall have
occurred or that no Vehicles shall remain subject to the Lease and is
irrevocable until such date so long as no Event of Default shall have occurred
and be continuing.
Participation
Agreement
EXHIBIT
C-2
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
BRAC
Trust No. 2005-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (BRAC Trust No.
2005-[ ]) | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
C-3 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of NOMINEE]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of Budget Truck Trust I, a Delaware
statutory trust (the “Nominee”) under the Nominee Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005 (as amended, modified and supplemented from
time to time, the “Nominee Agreement”), among the Nominee, the Lessor (as such
term is defined in Appendix A to the Participation Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005, among BRAC Trust No. 2005-[ ], as Owner
Trust, Wilmington Trust Company, acting in its individual capacity only to the
extent expressly stated therein and otherwise solely in its capacity as Owner
Trustee under the Trust Agreement, as Owner Trustee, Budget Rent A Car System,
Inc., as Lessee, Cendant Corporation, as Guarantor and the Owner Participant
named therein; capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in such Appendix A), duly authorized for the
purpose, acting on behalf of the Nominee, hereby make, constitute and appoint
(so long as no Event of Default shall have occurred and be continuing) as the
Nominee’s attorney-in-fact (i) the Lessee, acting through any of its “District
Managers”, “City Managers”, “Fleet Managers” or “Turn-back Managers” or (ii) the
Guarantor, acting through any of its duly authorized representatives, on behalf
of the Nominee and in its name, place and stead, for the special purpose of, (1)
upon the sale of any Vehicle pursuant to Sections 13 or 14 of the Lease (other
than sales to the Lessee) in accordance with the terms and conditions thereof,
doing all things necessary, including, without limitation, executing any
documents in the name of the Nominee, to properly transfer title and
registration of such Vehicle to the purchaser thereof and (2) applying for
duplicate certificates of title indicating the lien of the Owner Trust on such
Vehicles (or Eligible Vehicles) where original certificates of title have been
lost or destroyed. This power of attorney shall become effective on such date,
after the first Funding Date, that the Remarketing Termination Date shall have
occurred or that no Vehicles shall remain subject to the Lease, and is
irrevocable so long as no Event of Default shall have occurred and be
continuing.
Participation
Agreement
EXHIBIT
C-3
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
Budget
Truck Trust I, by Wilmington Trust Company, not in its individual capacity
but solely as trustee under the Trust Agreement (BRAC Trust No. 2005-[
]) | ||
|
as
Nominee | ||
|
By |
||
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
C-4 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of Owner Trust]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of BRAC Trust No. 2005-[ ], a Delaware
statutory trust (the “Trust”), acting in its capacity as Owner Trust (in such
capacity, the “Owner Trust”) under the Trust Agreement (BRAC Trust No. 2005-[
]), dated as of May [ ], 2005 (as amended, modified and supplemented from time
to time, the “Trust Agreement”) among Wilmington Trust Company, as Owner
Trustee, and the Owner Participant (as such term is defined in Appendix A to the
Participation Agreement dated as of May [ ], 2005 (the “Participation
Agreement”), among the Owner Trust, Wilmington Trust Company, acting in its
individual capacity only to the extent expressly stated therein and otherwise
solely in its capacity as Owner Trustee under the Trust Agreement, as Owner
Trustee, Budget Rent A Car System, Inc., as Lessee, Cendant Corporation, as
Guarantor and the Owner Participant named therein; capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in such
Appendix A), duly authorized for the purpose, acting on behalf of the Owner
Trust, hereby make, constitute and appoint (so long as no Event of Default shall
have occurred and be continuing) as the Owner Trust’s attorney-in-fact (i) the
Lessee, acting through any of its “District Managers”, “City Managers”, “Fleet
Managers” or “Turn-back Managers” or (ii) the Guarantor, acting through any of
its duly authorized representatives, on behalf of the Owner Trust and in its
name, place and stead, for the special purpose of, upon the sale of any Vehicle
pursuant to Sections 13 or 14 of the Lease in accordance with the terms and
conditions thereof, releasing the Owner Trust’s lien on such Vehicle (including
any Vehicle for which the certificate of title is attached hereto or identified
on the annex attached hereto) by executing any documents required in connection
therewith. This power of attorney shall become effective on such date, after the
first Funding Date, that the Remarketing Termination Date shall have occurred or
that no Vehicles shall remain subject to the Lease, and is irrevocable so long
as no Event of Default shall have occurred and be continuing.
Participation
Agreement
EXHIBIT
C-4
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
BRAC
Trust No. 2005-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (BRAC Trust No.
2005-[ ]) | ||
|
By |
||
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
D | |
|
to | |
|
Participation
Agreement |
[ON
LESSEE LETTERHEAD]
[FORM OF
FUNDING REQUEST]
________________
__, 2005
Wilmington
Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890-0001
Attn:
_______________
Gentlemen:
We refer
to the Participation Agreement (BRAC Trust No. 2005-[ ]), dated as of May [ ],
2005 (as amended from time to time, the “Participation
Agreement”; the
terms defined in Appendix A to the Participation Agreement being used herein as
therein defined) among Budget Rent A Car System, Inc., as Lessee, BRAC Trust No.
2005-[ ], as Owner Trust, Wilmington Trust Company, acting in its individual
capacity only to the extent expressly stated therein and otherwise solely in its
capacity as Owner Trustee under the Trust Agreement, as Owner Trustee, Cendant
Corporation, as Guarantor and [OWNER PARTICIPANT], as Owner Participant, and
hereby give you irrevocable notice pursuant to Section 2.3 of the Participation
Agreement, that we hereby request a Funding under the Participation Agreement,
and in that connection set forth below the information relating to such Funding
as required by Section 2.3 of the Participation Agreement:
(i) The
proposed Funding Date is [_____________.]
(ii) The
Specific Identification, Purchase Price and Scheduled Expiration Date relating
to the Vehicles to be purchased on such proposed Funding Date are set forth on
Annex A hereto.
(iii) The
aggregate Purchase Price of the Vehicles to be purchased on the proposed Funding
Date is $__________.
[(iv) The
proposed Funding Date will be the Final Funding Date.]
__________________________
|
1 |
Insert
if such Funding Date is to be the Final Funding
Date. |
Participation
Agreement
EXHIBIT
D
Page
2
|
Very
truly yours, | ||
|
Budget
Rent A Car System, Inc. | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Participation
Agreement
|
ANNEX
A | |
|
to | |
|
Notice of
Funding |
INFORMATION
RELATING TO VEHICLES
|
Make |
Model
Vehicle |
V.I.N.
Number |
Unit
Number |
Vehicle
Type |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Scheduled
Expiration
Date |
Participation
Agreement
|
EXHIBIT
E | |
|
to | |
|
Participation
Agreement |
BILL
OF SALE
Pursuant
to the provisions of the Participation Agreement (BRAC Trust No. 2005-[ ]) dated
as of May [ ], 2005 (the “Participation Agreement”) among Budget Rent A Car
System, Inc., as Lessee (“BRAC”), BRAC Trust No. 2005-[ ], as Owner Trust,
Wilmington Trust Company, acting in its individual capacity only to the extent
expressly stated therein and otherwise solely in its capacity as Owner Trustee
under the Trust Agreement, as Owner Trustee, Cendant Corporation, as Guarantor
and [OWNER PARTICIPANT] as Owner Participant (all capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in Appendix A to the Participation Agreement), and for the consideration of Ten
Dollars ($10.00) and other good and valuable consideration, the receipt of which
is hereby acknowledged, BRAC, (the “Seller”) does hereby (i) confirm all of its
representations and warranties contained in Section 4.1(f) of the Participation
Agreement and (ii) grant, sell, assign, transfer and convey to the Owner Trust
(the “Buyer”), and the Buyer’s successors and assigns, all of the Seller’s
right, title and interest in and to the following assets (collectively, the
“Property”):
|
(1) |
the
light-duty and medium-duty box trucks more fully described on Schedule A
hereto (each individually a “Vehicle” and collectively, the “Vehicles”);
|
|
(2) |
the
rights of the Seller under the Nominee Agreement (BRAC Trust No. 2005-[
]), dated as of May [ ], 2005, among Budget Truck Trust I, BRAC and the
Owner Trust, in respect of the Vehicles; |
|
(3) |
all
Warranties; |
|
(4) |
the
certificates of title issued, or to be issued, by the applicable state
governmental authorities and applications for certificates of title with
respect to each of the Vehicles; and |
|
(5) |
the
certificate of origin with respect to each of the Vehicles for which a
certificate of title, or applications therefor, have been
made. |
TO HAVE
AND TO HOLD the Vehicles hereby conveyed, sold, transferred, assigned and
delivered unto the Buyer, and its successors and assigns, to its own use and
behoof forever.
Participation
Agreement
EXHIBIT
E
Page
2
IN
WITNESS WHEREOF, the Seller has caused this instrument to be executed by its
duly authorized officer as of this __th day of May, 2005.
|
BUDGET
RENT A CAR SYSTEM, INC. | ||
|
By |
| |
|
Name: | ||
|
Title:
| ||
Participation
Agreement
|
SCHEDULE
A | |
|
to | |
|
Bill
of Sale |
VEHICLE
DESCRIPTION
|
Count |
Expected
Truck Completion
Date |
Make |
Model |
V.I.N.
Number |
Unit
Number |
VehicleType |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Participation
Agreement
APPENDIX
A
DEFINITIONS
The
following terms shall have the following meanings for all purposes and such
meanings are equally applicable both to the singular and plural forms of the
terms defined. Any agreement defined or referred to in this Appendix A shall
include each amendment, modification and supplement thereto that may (in
accordance with the terms of the Operative Documents) be effective from time to
time, except as otherwise expressly indicated. The definition of any Person
herein shall include its successors and permitted assigns.
“Adverse
Business Relationship” shall mean the existence of (a) overtly threatened or
pending material litigation or arbitral proceedings between a proposed
transferee and the Lessee, the Guarantor or any Affiliate thereof or (b) any
other event which the Lessee reasonably demonstrates constitutes a material
adverse relationship between the proposed transferee and the Lessee, Guarantor
or any Affiliate thereof.
“Affiliate”
shall mean, with respect to any Person, any other Person controlled by, in
control of or under common control with such Person, either directly or
indirectly through other Affiliates.
“Anticipated
Initial Funding Date” shall have the meaning provided on Schedule
I hereto.
“Appraiser”
shall mean Marshall & Stevens, Inc.
“Bank”
shall mean the bank or trust company acting as Owner Trustee, in its individual
capacity.
“Base
Term” shall mean, for each Vehicle, the period beginning on the Funding Date
therefor, and ending (1) as to a Gas Engine Vehicle, 42 months after the date on
which the Funding Date in respect of such Vehicle occurred, and (2) as to a
Diesel Engine Vehicle, 54 months after the date on which the Funding Date in
respect of such Vehicle occurred.
“Basic
Rent” shall mean the rent payable for the Vehicles on each Rent Payment Date
pursuant to Section 3.1 of the Lease.
“Bill of
Sale” shall mean, with respect to any Funding Date, the bill of sale of the
Lessee, substantially in the form of Exhibit
E to the
Participation Agreement, conveying its owner-ship interest in the Funding Date
Vehicles to the Lessor free and clear of all Liens (other than Permitted
Liens).
“Budget
Parties” shall mean the Lessee and the Guarantor.
APPENDIX
A
Page
2
“Business
Day” shall mean any day except Saturday, Sunday or any other day on which banks
are required or authorized to close in New York, New York or Wilmington,
Delaware.
“Closing
Date” shall have the meaning provided on Schedule
I
hereto.
“Code”
shall mean, except as otherwise provided, the Internal Revenue Code of 1986, as
amended from time to time, unless the context otherwise requires.
“Commitment”
shall have the meaning provided on Schedule
I
hereto.
“Corporate
Trust Office” shall mean the principal corporate trust office of the Owner
Trustee, which office is, on the date of delivery of the Trust Agreement,
located at the address of the Owner Trustee set forth on Schedule
III to the
Participation Agreement.
“Costs or
Expenses” shall have the meaning provided in Section 5.1 of the Participation
Agreement.
“Default”
shall mean an event or condition which, with notice or lapse of time or both,
would become an Event of Default.
“Default
Termination Date” shall mean the date, if any, the Lease is terminated pursuant
to Section 11 thereof as a result of an Event of Default.
“Diesel
Engine Vehicle” shall mean an Eligible Vehicle which is manufactured to operate
on diesel fuel.
“Early
Termination Date” shall have the meaning provided in Section 13 of the
Lease.
“Eligible
Vehicle” shall mean a light or medium duty box truck which is equipped with
either a gas or a diesel engine, and having a chassis of 10, 16 or 24 feet,
manu-factured by a Manufacturer and equipped with a cargo box and other
improvements, which truck is further identified and described on Schedule
IV to the
Participation Agreement.
“Employee
Benefit Plan” shall mean any employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title IV of ERISA and which is maintained by or
contributed to by the Lessee or any Related Person or to which the Lessee or any
Related Person has any liability.
“Environmental
Law” shall mean any and all federal, state, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees or requirements of any
govern-mental authority regulating, relating to or imposing liability standards
of conduct concern-ing any Hazardous Waste or environmental protections, as now
or at any time hereafter in effect, including, without limitation, the Clean
Water Act, the Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act of 1986, the Emergency
Planning and Community Right to Know Act, the Resource Conservation and Recovery
Act, the Safe Drinking Water Act, the Toxic Substances Control Act, together, in
each
2
APPENDIX
A
Page
3
case,
with each amendment, supplement or other modification thereto, and the
regulations promulgated thereunder and all substitutions therefor.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, or
any successor statute.
“Event of
Default” shall have the meaning provided in Section 10 of the
Lease.
“Event of
Loss” shall have the meaning provided in Section 12.1 of the Lease.
“Event of
Loss Date” shall have the meaning provided in Section 12.1 of the
Lease.
“Expiration
Date” shall mean, in respect of any Vehicle, the earlier of (i) the Default
Termination Date, (ii) the date on which a Vehicle is sold pursuant to Section
13.2 of the Lease, (iii) the Sale Termination Date (as defined in Section
13.1(b) of the Lease) and (iv) the Termination Date in respect of such Vehicle
(or if such Vehicle shall have not been sold on or before the Termination Date,
the Remarketing Termination Date).
“Fair
Market Sales Value” of any or all of the Vehicles shall mean the open market
wholesale sales value in a cash lump sum that a willing and informed buyer would
pay for such Vehicle or Vehicles to a willing and informed seller in an
arm’s-length purchase (which neither party is under any compulsion to enter
into), “as-is, where-is with all faults” as deter-mined by the Appraiser and if
any Vehicle is not returned to the Lessor in compliance with the return
provisions of the Lease, the Lessor’s cost for transporting such Vehicle to the
closest location designated in Schedule
I to the
Lease shall be subtracted from the Fair Market Sales Value for such
Vehicle.
“Final
Funding” shall mean the Funding identified as the Final Funding in the notice
delivered to the Owner Trustee by the Lessee pursuant to Section 2.3 of the
Participation Agreement with respect to such Funding.
“Final
Funding Date” shall mean the Funding Date on which the Final Funding is
held.
“Fleet”
shall mean, at any time, all Vehicles then subject to the Lease.
“Funding”
shall mean the funding by the Owner Participant to the Owner Trust pursuant to
Section 2.1 of the Participation Agreement on a Funding Date with respect to a
portion of the Fleet.
“Funding
Date” shall mean the date on which a Funding with respect to any portion of the
Fleet is held, which shall fall on the last day of any given month (or, if such
day is not a Business Day, the immediately preceding Business Day), or such
other date as the Lessee and the Owner Participant may agree from time to
time.
“Funding Date Lease Supplement” shall mean a Lease
Supplement dated a Funding Date and entered into by the Lessor and the Lessee on
such Funding Date, substantially
3
APPENDIX
A
Page
4
in the
form of Exhibit
B to the
Lease, in accordance with the provisions of the Participation
Agreement.
“Funding
Date Vehicle” shall mean, with respect to any Funding Date, an Eligible Vehicle
being purchased by the Owner Trust on such Funding Date pursuant to the terms of
the Participation Agreement.
“GAAP”
shall mean the generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect as of the relevant date of
determination.
“Gas
Engine Vehicle” shall mean an Eligible Vehicle which is manufactured to operate
on gasoline.
“Governmental
Body” shall mean any department, commission, board, bureau, court, legislature,
agency, instrumentality or authority of the United States of America or any
political subdivision thereof.
“Guarantor”
shall mean Cendant Corporation, a Delaware corporation.
“Guaranty”
shall have the meaning provided on Schedule
I hereto.
“Hazardous
Waste” means any hazardous materials, hazardous wastes, hazardous or toxic
substances, defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, gasoline and any other petroleum
products (including crude oil or any fraction thereof), and materials exhibiting
the characteristics of ignitability, corrosivity, reactivity or extraction
procedure toxicity, as such terms are defined in connection with hazardous
materials or hazardous wastes or hazardous or toxic substances in any
Environmental Law.
“Indemnified
Person” shall mean each of the Owner Trustee, the Bank, any separate Owner Trust
or additional Owner Trust, the Owner Participant, the Nominee Trustee, the
Nominee, permitted successors and assigns and the respective directors,
employees, servants, agents and Affiliates of such Persons.
“Information
Memorandum” shall mean the Information Memorandum, dated ________, 2005,
relating to a $________TRAC Lease Financing of New Light Duty and Medium-Duty
Box Trucks.
“IRS”
shall mean the Internal Revenue Service.
“Judgment”
shall mean any judgment, decree, order or award of any arbitration board or any
court or other Governmental Body.
“Lease”
shall have the meaning provided on Schedule
I
hereto.
4
APPENDIX
A
Page
5
“Lease
Supplement” shall mean a supplement to the Lease which is either a Funding Date
Lease Supplement or a supplement entered into for the purpose of amending,
modifying or supplementing the Lease or any Lease Supplement.
“Lease
Term” shall mean, for any Vehicle, the period commencing on such Vehicle’s
Funding Date and ending on the earlier to occur of such Vehicle’s Termination
Date or on such Vehicle’s Remarketing Termination Date.
“Lessee”
shall mean Budget Rent A Car System, Inc., a Delaware corporation.
“Lessee
Person” means Lessee, Guarantor, their Affiliates, any agent or employee of
Lessee, any of Lessee’s successors, assigns or transferees, any user of any
Vehicle (or any part thereof) during the Lease Term or any Person having custody
or possession of any Vehicle (or any part thereof) during the Lease Term for
such Vehicle (but not including the Owner Participant or Owner Trust, or any
person claiming through Owner Participant or Owner Trust).
“Lessee
Sale Termination Date” shall have the meaning provided in Section 13.1(b) of the
Lease.
“Lessor”
shall mean the Owner Trust.
“Lessor’s
Estate” shall mean all estate, right, title and interest of the Owner Trust in
and to the Fleet, the Participation Agreement, the Lease, the Warranties, the
Bill of Sale and the Nominee Agreement.
“Lessor’s
Liens” shall mean the Owner Trustee’s Liens.
“Lessor’s
Transaction Costs” shall mean those costs and expenses of the Lessor specified
in clauses (ii) through (vii) of the definition of Transaction
Costs.
“Lien”
shall mean any mortgage, lien or charge on, security interest in or condi-tional
sale or other title retention agreement or other encumbrance of any nature
whatsoever.
“Manufacturers”
shall mean General Motors Corporation, International Truck and Engine
Corporation and Ford Motor Company, and “Manufacturer” shall mean any of such
companies.
“Maximum
Number of Owner Participants” shall have the meaning provided on Schedule
I
hereto.
“Merger
Event” shall have the meaning provided in Section 2.8 of the
Guaranty.
“Model
Year” shall mean the model year designated for an Eligible Vehicle by the
manufacturer thereof, which year shall be deemed for purposes hereof to commence
on the day announced by such manufacturer as the first day of such year.
“Moody’s”
shall mean Moody’s Investor Services, Inc.
5
APPENDIX
A
Page
6
“Net
Economic Return” shall have the meaning provided on Schedule
I
hereto.
“Net
Sales Proceeds” shall mean the net amount received upon a sale of any Vehicle
after deducting any costs incurred in connection with such sale and, for
purposes of the sale of a Vehicle to the Lessee pursuant to Sections 13.2 or
14.2(b) of the Lease, shall be not less than the Fair Market Sales Value of such
Vehicle. In determining the Net Sales Proceeds of a Vehicle disposed of by the
Lessor pursuant to Section 11(a) of the Lease upon the occurrence of an Event of
Default (other than Section 11(a)(v) of the Lease), the costs of sale shall
include, without limita-tion, the payment of costs and expenses specified in
Section 11(a)(v)(B) of the Lease.
“Nominee”
shall mean Budget Truck Trust I, a Delaware statutory trust.
“Nominee
Agreement” shall have the meaning provided on Schedule I hereto.
“Nominee
Trust Agreement” shall mean the Trust Agreement (Budget Truck Trust I), dated as
of February 17, 2004, among Budget Rent A Car System, Inc., BRAC Trust No.
2004-1, such parties as may become party thereto from time to time, and
Wilmington Trust Company, as trustee.
“Nominee
Trust Supplement” shall have the meaning provided on Schedule I
hereto.
“Nominee
Trustee” shall mean Wilmington Trust Company, not in its individual capacity,
but solely as trustee of the Nominee.
“Officer’s
Certificate” of any entity shall mean a certificate executed on behalf of such
entity by a Responsible Officer thereof.
“Operative
Documents” shall mean the Participation Agreement, the Lease (including the
Lease Supplements), the Nominee Agreement, the Nominee Trust Agreement, the Bill
or Bills of Sale, the Powers of Attorney, the Guaranty, the Trust Agreement and
the Tax Indemnity Agreement.
“Overdue
Payment Rate” shall mean a floating per annum rate equal to the lesser of (i)
two percent (2%) above the Reference Rate in effect from time to time and (ii)
the maximum interest rate permitted by applicable law.
“Owner
Participant” shall have the meaning provided on Schedule
I
hereto.
“Owner
Participant’s Liens” shall mean all Liens against the Fleet, the warranties
related to the Fleet, the insurance policies secured in respect of the Fleet as
contemplated by Section 8 of the Lease and the proceeds of the foregoing which
result from:
(a) claims
against the Owner Participant unrelated to the transactions contemplated by the
Operative Documents,
6
APPENDIX
A
Page
7
(b) acts by
the Owner Participant creating a Lien (unless such Lien is consented to by the
Lessee), or
(c) breaches
by the Owner Participant of any of its duties and obligations under any of the
Operative Documents to which it is a party.
“Owner
Trust” shall have the meaning provided on Schedule
I
hereto.
“Owner
Trustee” shall mean Wilmington Trust Company, acting (except where express
reference is made to the Owner Trustee in its individual capacity) not in its
individual capacity but solely as trustee under the Trust
Agreement.
“Owner
Trustee’s Liens” shall mean all Liens against the Fleet, the warranties related
to the Fleet, the insurance policies secured in respect of the Fleet as
contemplated by Section 8 of the Lease and the proceeds of the foregoing which
result from:
(a) claims
against the Owner Trustee or the Bank unrelated to the transactions contemplated
by the Operative Documents,
(b) acts by
the Owner Trustee (in its individual or trust capacity) creating a Lien (unless
such Lien is consented to by the Lessee or such acts are taken in connection
with an Event of Default),
(c) breaches
by the Owner Trustee or the Bank of any of its duties and obligations under any
of the Operative Documents to which it is a party,
(d) claims of
the Bank (except such claims as are expressly permitted by the Operative
Documents), or
(e) any Tax
on the Lessor’s Estate other than a Tax which is indemnified by the Lessee
pursuant to Section 5.2 of the Participation Agreement.
“Participation
Agreement” shall have the meaning provided on Schedule
I
hereto.
“Per Diem
Rent” shall mean, in respect of any Vehicle , the product of (i) the Per Diem
Rent Factor for such Vehicle and (ii) the Purchase Price for such
Vehicle.
“Per Diem
Rent Factor” shall have the meaning, in respect of any Vehicle Type, specified
with respect thereto on Schedule II to the Lease, as such percentage may be
adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle.
“Permitted
Contest” shall mean a contest permitted by and meeting the require-ments of
Section 5.2 of the Lease.
“Permitted Investments” shall mean (a) investments in
direct obligations of the government of the United States or any instrumentality
thereof, the obligations of which are guaranteed by such government, maturing
within 90 days of the date of acquisition thereof, (b)
7
APPENDIX
A
Page
8
investments
in obligations fully guaranteed by the government of the United States or any
instru-mentality thereof, the obligations of which are guaranteed by such
government, maturing within 90 days of the date of acquisition thereof, (c)
investments in open market commercial paper issued by any corporation rated at
least P-1 by Moody’s Investors Service, Inc. or A-1 by Standard & Poors
Corporation maturing within 90 days from the date of acquisition thereof,
(d) investments in certificates of deposit issued by, or bankers’
acceptances of, or repurchase agreements (fully collateralized by transfer of
any of the other obligations referred to above in this definition) with, or time
deposits or a deposit account issued by, any bank, trust company or national
banking association incorporated or doing business under the laws of the United
States of America or any State thereof having a combined capital and surplus of
at least $500,000,000, in each case maturing within 90 days of the date of
acquisition thereof, and (e) a money market fund registered under the Investment
Company Act of 1940 (15 U.S.C. § 809-1 et seq. as from time to time amended),
the portfolio of which is limited to United States government obligations and
United States agency obligations as described in (a) and (b) above.
“Permitted
Liens” shall mean:
(a) Liens for
Taxes (i) not yet delinquent or (ii) being contested in good faith in a
Permitted Contest;
(b) Liens of
mechanics, laborers, garagemen, garbagekeepers, materialmen, suppliers, vendors,
workmen and carriers and any other statutory or common law possessory Liens
(other than Liens of the Manufacturers and the initial vendor) created in the
ordinary course of business for sums of money (other than borrowed money) which
under the terms of the related contracts are not at the time due, provided that
any reserve or other appropriate provision required by generally accepted
accounting principles shall have been made in respect thereof and provided that
all such Liens permitted by this clause (b) shall not in the aggregate be
material in respect of the condition or operations of the Lessee;
(c) the
respective rights and interests of the Owner Participant, the Owner Trust, the
Lessee, the Nominee and the Guarantor as are permitted by and contemplated under
the Operative Documents;
(d) Liens
arising out of judgments or awards against the party or parties obligated to
keep the subject asset free of Liens with respect to which a timely appeal or
proceeding for review is being prosecuted in good faith in a Permitted
Contest;
(e) Liens
arising out of pre-judgment garnishment, attachment or other similar actions or
proceedings, provided the same are removed within 15 days of the date of
creation thereof or fully bonded and so long as such actions do not involve any
material risk of the sale, forfeiture or loss of the encumbered asset or
material risk of any liability to the party or parties intended as the
beneficiary of the requirement that the subject asset be kept free of Liens;
and
(f) the
Lessor’s Liens and the Owner Participant’s Liens.
“Permitted
Use Agreements” shall have the meaning provided in Section 7.3 of the
Lease.
8
APPENDIX
A
Page
9
“Person”
shall mean and include any individual, firm, corporation, association, trust,
partnership, joint venture, limited liability company, unincorporated
organization or other enterprise or any government or any agency, political
subdivision, department or instrumentality thereof.
“Powers
of Attorney” shall mean the limited powers of attorney granted by the Owner
Trust and the Nominee, respectively, to the Lessee on the Closing Date,
substantially in the forms of Exhibits C-1, C-2, C-3 and C-4 to the
Participation Agreement.
“Purchase
Price” shall mean, in respect of each Vehicle, an amount set forth in the
applicable Lease Supplement equal to the sum of (a) the actual purchase price
paid or payable to the applicable Manufacturer in respect of such Vehicle, (b)
the amount paid or payable to the applicable box manufacturer in respect of such
Vehicle and (c) freight, installation, and point of purchase expenses as are
necessary to place such Vehicle into commercial service.
“Qualified
Entity” shall mean a corporation, partnership, limited liability company or
business trust (1) which, as of the date of determination, has an unsecured debt
rating of not less than Baa1 from Moody’s and BBB from S&P (or, if such
entity is not rated by Moody’s or S&P, a comparable rating from another
nationally recognized rating agency) and (2) to which the Owner Participant has
not objected within thirty (30) days of receipt of the notice referred to in
Section 5.4 of the Participation Agreement and receipt by the Owner Participant
of all relevant information, which objection must be based upon one or more of
the following: (A) legal or regulatory prohibitions or constraints which would
apply to the Owner Participant if the proposed Qualified Entity were the Lessee
or a guarantor thereof and a legal opinion to such effect has been provided; (B)
internal limitations of the Owner Participant with respect to total credit
exposure to the proposed Qualified Entity, the country in which such proposed
Qualified Entity is domiciled or the industry (other than the vehicle rental
industry) of such Qualified Entity, so long as such limitations are based on an
established policy of the Owner Participant or, if no established policy exists,
limitations reasonably determined at the time in good faith by Owner Participant
and presented to the Lessee, together with an explanation as to the reasons for
such limitations; (C) the existence of overtly threatened or pending material
litigation or arbitral proceedings between the proposed Qualified Entity or any
of its Affiliates and the Owner Participant or any of its Affiliates and
evidence to such effect; or (D) any other written, established policy of the
Owner Participant which would preclude a relationship with the proposed
Qualified Entity and evidence to such effect has been provided.
"Qualified
Merger Entity" shall be a corporation, partnership, limited liability company or
business trust which, following such Merger Event, shall have unsecured debt
ratings from S&P or Moody's which are not (i) two (2) full notches or more
lower than the unsecured debt ratings of Guarantor from either of such
rating agencies immediately prior to such Merger Event or (ii) in any case,
lower than BBB- from S&P or Baa3 from Moody's, unless, in the case of clause
(ii), the unsecured debt ratings of Guarantor prior to such Merger Event
were lower than BBB- from S&P or Baa3 from Moody's in which case the
Surviving Entity shall have an unsecured debt rating from each rating agency
which is equal to or greater than Guarantor's ratings.
9
APPENDIX
A
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10
“Quarterly
Rent Factor” shall have the meaning, with respect to any Vehicle Type, specified
with respect thereto on Schedule II to the Lease, as such percentage may be
adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle.
“Reference
Rate” shall mean such rate as announced from time to time by Citibank, N.A., as
its prime rate.
“Regulations”
shall mean regulations promulgated by the United States Treasury Department
under the Code.
“Related
Indemnitee” shall mean, with respect to an Indemnified Person, (i) the
Affiliates of such Person and (ii) the agents, shareholders, directors,
employees and officers of such Indemnified Person and its Affiliates.
“Related
Person” shall mean any trade or business, whether or not incorporated, that
(together with the Lessee) is under common control as described in Sections
414(b) and (c) of the Code and with respect to Section 412 of the Code and
Section 302 of ERISA, Sections 414(b), (c), (m) and (o) of the
Code.
“Remarketing
Agent” shall mean any Person acting as a remarketing agent with respect to the
remarketing of the Vehicles.
“Remarketing
Payment Date” shall have the meaning provided in Section 14.2(b) of the
Lease.
“Remarketing
Termination Date” shall have the meaning provided in Section 14.2(d) of the
Lease.
“Remedy
Payment Date” shall have the meaning provided in Section 11 of the
Lease.
“Renewal
Rent” shall mean, in respect of a given Vehicle during the Renewal Term for such
Vehicle, if a payment of Renewal Rent is payable on a Rent Payment Date, the
product of (a) the Purchase Price for such Vehicle and (b) the Quarterly Rent
Factor for such Vehicle and, in cases in which the Renewal Rent is to be paid on
a date other than a Rent Payment Date, Per Diem Rent for such Vehicle multiplied
by the number of days since the date on which Basic Rent or Renewal Rent was
last payable.
“Renewal
Sale Date” shall have the meaning provided in Section 13.1(c) of the
Lease.
“Renewal
Settlement Date” shall have the meaning provided in Section 13.1(c) of the
Lease.
“Renewal
Term” shall have the meaning provided in Section 14.1(b) of the
Lease.
10
APPENDIX
A
Page
11
“Renewal
TRAC Percentage” shall, as of any date of determination, with respect to any
Vehicle Type, equal the percentage applicable to the calculation of Termination
Value for such Vehicle Type as of such date, as set forth on the Lease
Supplement in respect of such Vehicle; provided that in
all cases, the Renewal TRAC Percentage of any Vehicle of a particular Vehicle
Type as of the date which is one year after the commencement of the Renewal
Term, if any, with respect to such Vehicle shall be as indicated on Schedule
IV to the
Lease.
“Rent”
shall mean Basic Rent, Supplemental Rent, and any Renewal Rent, if
applicable.
“Rent
Payment Date” shall mean, during the Lease Term for each Vehicle, for the
initial Rent Payment Date, the 30th day of
the third calendar month after the Funding Date for such Vehicle (or if such day
is not a Business Day, on the immediately preceding Business Day), and
thereafter the 30th day of
the third calendar month after the preceding Rent Payment Date (or if such day
is not a Business Day, on the immediately preceding Business Day).
“Rent
Period” shall mean, as to each Vehicle, each succeeding Rent Period determined
in accordance with Section 3.2 of the Lease.
“Responsible
Officer” shall mean:
(a) with
respect to the Lessee, (i) any of the Lessee’s management or supervisory
personnel in the Lessee’s fleet administration or motor vehicle accounting
departments at its North American headquarters (including their supervisors) or
(ii) any of the Lessee’s management or supervisory personnel who at the time are
responsible for the administration of the Operative Documents (including their
supervisors);
(b) with
respect to the Owner Participant, any of the Owner Participant’s management or
supervisory personnel who at the time are responsible for the administration of
the Operative Documents (including their supervisors); and
(c) with
respect to the Owner Trust, any officer thereof who at the time is authorized to
act in connection with the transactions contemplated by the Operative Documents
or any officer with direct responsibility for administration of the Trust
Estate.
“S&P”
shall mean Standard & Poor’s Corporation.
“Scheduled
Expiration Date” shall mean, in respect of any Vehicle, the last day of the Base
Term for such Vehicle, which date shall be indicated on Schedule A to the
Funding Date Lease Supplement relating to such Vehicle.
“Securities
Act” shall mean the Securities Act of 1933 as in effect from time to
time.
“Specific
Identification”, “Specifically Identify”, “Specifically Identifies” and
“Specifically Identified” shall mean, with respect to any Vehicle,
identification of the make, model, vehicle identification number, unit number
and box length for such Vehicle.
11
APPENDIX
A
Page
12
“Specified
Default” shall mean any Default under Sections 10(a), (b) (e), (f) or (g) of the
Lease or any Event of Default.
“Supplemental
Rent” shall mean (without duplication of Basic Rent): (a) all amounts,
liabilities and obligations which the Lessee expressly assumes or agrees to pay
to or for the benefit of the Owner Trust, the Nominee, the Owner Participant or
any Indemnified Person under the Operative Documents, whether or not designated
as Supplemental Rent, including, without limitation, damages for breach of any
covenant, representation, warranty or agreement therein and payments of
Termination Value, but excluding Basic Rent; and (b) all amounts payable by the
Lessor pursuant to the Nominee Agreement, at the time when such amounts are
payable by the Lessor.
“Surviving
Entity” shall have the meaning provided in Section 5.4 of the Participation
Agreement.
“Tax” and
“Taxes” shall have the meanings provided in Section 5.2 of the Participation
Agreement.
“Tax
Assumptions” shall mean those assumptions set forth in Section 2 of the Tax
Indemnity Agreement.
“Tax
Indemnity Agreement” shall have the meaning provided on Schedule
I hereto.
“Tax Law
Change” shall mean any change (or any change proposed by the chairman of the
House of Representatives Ways and Means Committee or the Senate Finance
Committee or approved by either such committee, or set forth in a budget
proposal by the Department of the Treasury which could have an effective date
applicable to the Vehicles to be purchased on a Funding Date) in the Code or the
United States Treasury Income Tax Regulations that would affect the anticipated
U.S. federal income tax consequences to the Owner Participant of the
transactions contemplated by the Operative Documents.
“Termination
Date” shall mean, for any Vehicle, the date that such Vehicle is sold pursuant
to Section 14.2 of the Lease.
“Termination
Value” shall mean, as of any date of determination of such value in respect of a
Vehicle, (i) if such date of determination is a Rent Payment Date or another
date specified on Schedule B to the Funding Date Lease Supplement for such
Vehicle (a “Specified Date”), the percentage of the Purchase Price for such
Vehicle indicated for such date on Schedule
B to the
Funding Date Lease Supplement relating to such Vehicle (as such percentage may
be adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle); (ii) if such date of determination
is not a Rent Payment Date or another Specified Date, the Purchase Price for
such Vehicle multiplied by the interpolated percentage derived with reference to
the percentage indicated on Schedule
B to the
Funding Date Lease Supplement relating to such Vehicle (as such percentage may
be adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle) for the Rent Payment Dates or the
Specified Dates immediately preceding and
12
APPENDIX
A
Page
13
immediately succeeding such date of determination;
provided,
that, if such
date of determination is not a Rent Payment Date or another date specified on
Schedule B to the Funding Date Lease Supplement and occurs within the month
immediately preceding (but excluding) a Rent Payment Date, such amount shall be
the sum of (x) the percentage of the Purchase Price for such Vehicle indicated
on Schedule B to the applicable Lease Supplement in respect of such Vehicle on
the specified date immediately preceding such date of determination and (y) the
product of the Per Diem Rent for such Vehicle and the number of days elapsed
after such Specified Date.
“TRAC
Amount” shall mean, as of any date of determination and with respect to any
Vehicle sold by or on behalf of the Lessor (whether to the Lessee or a third
party), an amount equal to the TRAC Percentage or Renewal TRAC Percentage, as
applicable, of the Purchase Price for such Vehicle as of such date of
determination with respect to such Vehicle minus the Net Sales Proceeds with
respect to such Vehicle (it being understood that if a Vehicle is unsold, the
Net Sales Proceeds equals zero).
“TRAC
Certificate” shall have the meaning provided in Section 2 of the
Lease.
“TRAC
Percentage” shall have the meaning, with respect to any Vehicle Type, specified
in Schedule IV to the Lease. The TRAC Percentage shall apply to any calculation
of the TRAC Amount on the last day of the Base Term in respect of a
Vehicle.
“Transaction
Costs” means all of the out-of-pocket costs, fees and expenses incurred by the
Lessee, the Guarantor, the Owner Participant, the Owner Trust, the Bank and the
Nominee in connection with the negotiation, preparation, execution, delivery,
filing and recording of the Operative Documents and the transactions
contemplated thereby, including:
(i) (A) the
reasonable fees and disbursements of White & Case LLP, special counsel to
the Lessee and the Guarantor; (B) the reasonable fees and disbursements of
McAfee & Taft, special Oklahoma counsel to the Lessee and the Guarantor; and
(C) the reasonable fees of BTM Financial Services, Inc., as the Lessee’s
advisor;
(ii) the
reasonable fees, expenses and disbursements of (A) Thelen Reid & Priest LLP,
special counsel for the Owner Participant and any other special local counsel
for the Owner Participant, (B) Richards, Layton & Finger, P.A., special
counsel for the Owner Trust and the Bank, (C) Richards, Layton & Finger,
P.A., special counsel for the Nominee and (D) Richards, Layton & Finger,
P.A., counsel to the Nominee Trustee;
(iii) the
reasonable out-of-pocket costs and expenses of the Owner Participant, the Lessee
and the Guarantor;
(iv) the cost
of preparation and filing of UCC financing statements;
(v) the fees
and out-of-pocket costs and expenses of the Nominee;
(vi) the fees
and expenses of the Appraiser; and
(vii) the
initial but not ongoing fees and expenses of the Owner Trust.
13
APPENDIX
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14
“Transaction
Cost Maximum” shall have the meaning provided on Schedule
I
hereto.
“Trigger
Event” shall mean that the Lessor shall have obtained, shall have demanded or
shall be seeking to obtain, physical possession of the Fleet pursuant to Section
11 of the Lease by reason of the occurrence of an Event of Default.
“Trust
Agreement” shall have the meaning provided on Schedule
I hereto.
“U.C.C.”
shall mean the Uniform Commercial Code as adopted in any applicable jurisdiction
as may be in effect from time to time.
“United
States Person” shall have the meaning provided in Section 7701(a)(30) of the
Code.
“Unsold
Vehicle” shall have the meaning provided in Section 14.2(d) of the
Lease.
“Vehicle”
shall mean, at any time, an Eligible Vehicle which at any time was purchased by
the Lessor pursuant to the Participation Agreement and made subject to the
Lease.
“Vehicle
Type” shall mean, with respect to any Vehicle, a Vehicle designation of
[“Vehicle Type A” or “Vehicle Type B”]1 , as set
forth in the applicable Lease Supplement in respect of any Vehicle.
“Vehicle
Type A” shall mean Gas Engine Vehicles, specifically it includes E350 10 foot
box trucks and E350 15 foot box trucks manufactured by Ford Motor Company and
Savana 15 foot box trucks manufactured by General Motors Corporation.
“Vehicle
Type B” shall mean Diesel Engine Vehicles, specifically it includes TC 7500 24
foot box trucks manufactured by General Motors Corporation, 4200 24 foot box
trucks and 4300 24 foot box trucks manufactured by International Truck and
Engine Corporation.
“Warranties”
shall have the meaning provided in Section 4.2 of the Lease.
14
Schedule
I to Appendix A
to the
Participation Agreement
Certain
Definitions
“Anticipated
Initial Funding Date” shall mean May [ ], 2005.
“Closing
Date” shall mean May [ ], 2005, or such later date as shall be agreed by the
parties to the Participation Agreement.
“Commitment”
shall mean $[__________].
“Guaranty”
shall mean the Guaranty Agreement (BRAC Trust No. 2005-[ ]), dated as of May [
], 2005, by the Guarantor in favor of the Owner Trust and the Owner
Participant.
“Lease”
shall mean the Lease Agreement (BRAC Trust No. 2005-[ ]), dated as of May [ ],
2005, between the Lessee and the Lessor.
“Maximum
Number of Owner Participants” shall mean one (1).
“Net
Economic Return” shall mean [______________]2 .
“Nominee
Agreement” shall mean the [Nominee Agreement (BRAC Trust No. 2005-[ ]) dated as
of May [ ], 2005 among the Nominee, the Lessee and the Lessor].
“Nominee
Trust Supplement” shall mean the Trust Supplement (BRAC Trust No. 2005-[ ]),
dated as of May [ ], 2005, among the Lessee, the Lessor and the
Bank.
“Owner
Participant” shall mean [OWNER PARTICIPANT].
“Owner
Trust” shall mean BRAC Trust No. 2005-[ ], a Delaware statutory
trust.
“Participation
Agreement” shall mean the Participation Agreement (BRAC Trust No. 2005-[ ]),
dated as of May [ ], 2005, among the Lessee, the Owner Participant, the Owner
Trust, the Guarantor and Wilmington Trust Company, in its individual capacity
only to the extent expressly therein and otherwise as Owner
Trustee.
“Tax
Indemnity Agreement” shall mean the Tax Indemnity Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005, between the Lessee and the Owner
Participant.
“Transaction
Cost Maximum” shall mean $[__________].
3
Schedule
I to Appendix A
to the
Participation Agreement
“Trust
Agreement” shall mean the Trust Agreement (BRAC Trust No. 2005-[ ]), dated as of
May [ ], 2005, between the Bank and the Owner Participant.
3
Exhibit
10.2
LEASE
AGREEMENT
(BRAC
Trust No. 2005-[ ])
Dated as
of May ____, 2005
among
BRAC
Trust No. 2005-[ ], as Lessor
WILMINGTON
TRUST COMPANY, in its individual
capacity
only to the extent expressly stated in Section 18.10
hereof
and otherwise not in its individual capacity but solely as
trustee
under the Trust Agreement (BRAC Trust No. 2005-[ ])
and
BUDGET
RENT A CAR SYSTEM, INC., as Lessee
THIS
LEASE AGREEMENT HAS BEEN EXECUTED IN SEVERAL COUNTER-PARTS. ONLY THE “ORIGINAL”
COUNTERPART OF THIS LEASE AGREEMENT CONTAINING THE RECEIPT THEREFOR EXECUTED BY
WILMINGTON TRUST COMPANY, AS OWNER TRUSTEE, ON THE SIGNATURE PAGE THEREOF
EVIDENCES THE MONETARY OBLIGATIONS OF LESSEE HEREUNDER AND TO THE EXTENT, IF
ANY, THAT THIS LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS
DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE AGREEMENT MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN SAID “ORIGINAL”
COUNTERPART.
Lease
Agreement
TABLE
OF CONTENTS
|
Page | ||
|
SECTION
1. |
DEFINITIONS |
1 |
|
SECTION
2. |
LEASE
OF VEHICLES |
1 |
|
SECTION
3. |
RENT;
FEES |
1 |
|
3.1
|
Rent |
1 |
|
3.2
|
Rent
Periods; Allocation of Rent |
2 |
|
3.3
|
Certain
Adjustments to Basic Rent |
2 |
|
3.4
|
Supplemental
Rent |
3 |
|
3.5
|
Payments |
4 |
|
SECTION
4. |
DISCLAIMER
OF WARRANTIES |
4 |
|
4.1
|
Disclaimer
of Warranties |
4 |
|
4.2
|
Certain
Agreements |
5 |
|
SECTION
5. |
LIENS |
6 |
|
5.1
|
Restrictions
on Lessee |
6 |
|
5.2
|
Permitted
Contests |
6 |
|
SECTION
6. |
QUIET
ENJOYMENT |
7 |
|
SECTION
7. |
OPERATION
AND MAINTENANCE; SUBLEASING |
8 |
|
7.1
|
Vehicle
Records |
8 |
|
7.2
|
Title
to Remain in Nominee; Vehicle Management; Location of
Vehicles |
8 |
|
7.3
|
Subleasing |
9 |
|
7.4
|
Maintenance
of the Vehicles |
9 |
|
SECTION
8. |
INSURANCE |
10 |
|
SECTION
9. |
INSPECTION |
11 |
|
SECTION
10. |
EVENTS
OF DEFAULT |
11 |
|
SECTION
11. |
REMEDIES |
13 |
|
SECTION
12. |
EVENT
OF LOSS |
16 |
|
12.1
|
Event
of Loss |
16 |
|
12.2
|
Application
of Payments from Others and Salvage |
16 |
Lease
Agreement
(i)
|
Page | ||
|
12.3
|
Application
of Payments During the Existence of an Event of
Default |
17 |
|
SECTION
13. |
EARLY
TERMINATION |
17 |
|
13.1
|
Early
Termination |
17 |
|
13.2
|
Remarketing
of Vehicles |
18 |
|
SECTION
14. |
END
OF LEASE OPTIONS; DISPOSITION |
19 |
|
14.1
|
Expiration
of Lease |
19 |
|
14.2
|
Lessee
Sale of Vehicles |
20 |
|
14.3
|
Condition
of a Vehicle at End of Lease; Storage |
21 |
|
14.4
|
Holding
Over |
21 |
|
SECTION
15. |
CERTAIN
COVENANTS |
22 |
|
15.1
|
Further
Assurances |
22 |
|
15.2
|
Filing
Financing and Continuation Statements |
22 |
|
SECTION
16. |
PAYMENT
DUTY ABSOLUTE |
22 |
|
SECTION
17. |
ASSIGNMENT |
23 |
|
SECTION
18. |
MISCELLANEOUS |
23 |
|
18.1
|
Notices |
23 |
|
18.2
|
Survival |
23 |
|
18.3
|
Confidentiality |
23 |
|
18.4
|
Amendments |
23 |
|
18.5
|
Severability |
23 |
|
18.6
|
Successors
and Assigns |
24 |
|
18.7
|
Counterparts |
24 |
|
18.8
|
Construction |
24 |
|
18.9
|
Governing
Law |
24 |
|
18.10
|
The
Lessor Not Acting in Individual Capacity |
24 |
|
18.11
|
Chattel
Paper |
24 |
|
18.12
|
Forum
Selection and Consent to Jurisdiction |
24 |
|
18.13
|
Waiver
of Jury Trial |
25 |
|
SCHEDULE
I |
- |
Return
Locations |
|
SCHEDULE
II |
- |
Closing
Date Rent Factors |
|
SCHEDULE
III |
- |
Pricing
Assumptions |
|
SCHEDULE
IV |
- |
TRAC
Amounts |
|
SCHEDULE
V |
- |
Closing
Date Renewal Termination Values |
|
EXHIBIT
A |
- |
TRAC
Certificate |
(ii)
|
Page |
|
EXHIBIT
B |
- |
Lease
Supplement |
Lease
Agreement
(iii)
LEASE
AGREEMENT
(BRAC
Trust No. 2005-[ ])
LEASE
AGREEMENT (BRAC Trust No. 2005-[ ]), dated as of May [ ], 2005, among BRAC TRUST
NO. 2005-[ ], as Lessor, WILMINGTON TRUST COMPANY, in its individual capacity
only to the extent expressly stated in Section 18.10 hereof and otherwise not in
its individual capacity but solely as trustee under the Trust Agreement (BRAC
Trust No. 2005-[ ]), and BUDGET RENT A CAR SYSTEM, INC., as Lessee.
SECTION
1. DEFINITIONS
All
capitalized terms used herein which are not defined in the body hereof shall
have the meanings specified in Appendix A to the Participation
Agreement.
SECTION
2. LEASE OF
VEHICLES
On each
Funding Date, upon execution and delivery of a Funding Date Lease Supplement and
the satisfaction of the conditions set forth in Section 3 of the Participation
Agreement, the Lessor will lease to the Lessee, and the Lessee will lease from
the Lessor, on the terms and subject to the conditions of this Lease, each
Funding Date Vehicle specified in such Funding Date Lease Supplement which shall
be incorporated herein and made a part hereof, for the period from and including
such Funding Date through the Expiration Date in respect of such Funding Date
Vehicle. Annexed to such Funding Date Lease Supplement and incorporated therein
and made a part thereof shall be (a) a schedule which sets forth for each such
Funding Date Vehicle: (i) the Specific Identification thereof; (ii) the Purchase
Price therefor; (iii) the Per Diem Rent Factor therefor (if applicable)
pertaining to each of the Base Term and the Renewal Term; (iv) the Quarterly
Rent Factor therefor pertaining to each of the Base Term and the Renewal Term;
and (v) the Scheduled Expiration Date therefor, (b) a schedule of percentages to
be used in calculating the Termination Value therefor from time to time
pertaining to each of the Base Term and the Renewal Term, and (c) a tax
certification in the form of Exhibit A hereto (the “TRAC Certificate”) by which
the Lessee (i) certifies under penalty of perjury that it intends that more than
50 percent of the use of the Vehicles leased hereunder will be in a trade or
business of the Lessee and (ii) states that it has been advised that it will not
be treated as the owner of the Vehicles for federal income tax purposes and by
which the Lessor acknowledges that it has no knowledge that the certification
given by the Lessee is false. The execution and delivery by the Lessor and the
Lessee, respectively, of each Funding Date Lease Supplement shall, without
further act, constitute irrevocable acceptance by the Lessee of the delivery of
the Vehicles which are the subject thereof for all purposes of this Lease and
the other Operative Documents on the terms set forth herein and
therein.
SECTION
3. RENT;
FEES
3.1
Rent.
The Lessee shall pay to the Lessor, as Basic Rent for all Vehicles leased
hereunder on each Rent Payment Date during the Lease Term, an amount equal to
the aggregate of the Basic Rent due for each Vehicle leased hereunder on such
Rent Payment Date. Subject to adjustment as provided in Section 3.3, the Basic
Rent due on each Vehicle leased hereunder during the Base Term applicable
thereto shall be an amount equal to the product of (a)
Lease
Agreement
the Purchase Price of such Vehicle, multiplied by (b)
the Quarterly Rent Factor applicable to such Vehicle, and such Basic Rent shall
be payable on each Rent Payment Date in respect of such Vehicle following the
commencement of the Base Term therefor. The Rent payable during any Renewal Term
shall be as described in Section 14, including any adjustment as may be required
by Section 3.3, and shall be payable on the dates indicated in Section
14.
3.2
Rent
Periods;
Allocation of Rent.
The first Rent Period in respect of a Vehicle shall commence on (and include)
the Funding Date for such Vehicle and end on (but exclude) the first Rent
Payment Date to occur following such Funding Date. Each succeeding Rent Period
shall commence on (and include) a Rent Payment Date and end on (but exclude) the
next succeeding Rent Payment Date. Basic Rent shall be allocated to each Rent
Period as set forth on Schedule C to the applicable Funding Date Lease
Supplement. The Lessor and the Lessee agree that such allocation is intended to
constitute an allocation of fixed rent within the meaning of Regulations Section
1.467-1(c)(2)(ii)(A).
3.3
Certain
Adjustments to Basic Rent.
(a) Adjustment
for Tax Law Change.
(i) In the event that a Tax Law Change shall occur after the Closing Date and on
or prior to a Funding Date and the Owner Participant shall have notified the
Lessee of such Tax Law Change prior to the Funding on such Funding Date, the Per
Diem Rent Factor and the schedules of Basic Rent and Termination Value in
respect of each of the Base Term and Renewal Term shall be adjusted upwards or
downwards by such amounts as will preserve the Owner Participant’s Net Economic
Return, which adjustments shall be computed solely on the basis of the Tax
Assumptions set forth in the Tax Indemnity Agreement (as such Tax Assumptions
may be adjusted pursuant to this Section 3.3(a)) and otherwise utilizing the
same methodology as was used in the initial calculation of the Per Diem Rent
Factor, Basic Rent, and Termination Value payable pursuant to this Lease. The
Owner Participant shall deliver a certificate to the Lessee setting forth such
revised schedules of Basic Rent and Termination Values certifying that the Per
Diem Rent Factor and such schedules were calculated in accordance with this
Section 3.3(a). At the request of the Lessee, the accuracy of any such
calculation shall be subject to confirmation by an independent accounting firm
selected by the Lessee and reasonably acceptable to the Owner Participant, with
the fees and expenses of such firm paid by the Lessee (unless the net present
value of such adjustments to Basic Rent and Termination Values differ from such
adjustments as calculated by such firm by more than 10 basis points (using a
discount rate equal to 4.00%), in which case the Owner Participant shall pay
such fees and expenses).
Notwithstanding
the foregoing, no such adjustments to the Per Diem Rent Factor, Basic Rent or
Termination Value shall take effect without the prior written consent of the
Lessee, it being understood that if the Lessee has not provided such consent on
or prior to a proposed Funding Date, such Funding Date shall be postponed until
such consent has been given or the Commitment of the Owner Participant in
respect of the Vehicle for which the adjustment has been proposed has been
terminated as provided in Section 2.9 of the Participation
Agreement.
(ii) Following
receipt of a notice of Funding as provided in Section 2.3 of the Participation
Agreement, the Owner Participant shall calculate the Per Diem Rent Factor, the
Quarterly Rent Factor, and the Termination Values in respect of each of the Base
Term and the Renewal Term (such factors, the “Rent Factors”) for the applicable
Funding Date Vehicles. Attached hereto as Schedule II are the Rent Factors for
each Vehicle Type which would be
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applicable
on the Anticipated Initial Funding Date assuming pricing assumptions (as set
forth on Schedule III hereto) are identical to those existing on [May [ ], 2005]
(the “Closing Date Rent Factors”). The calculation of the Rent Factors for any
Funding Date shall be computed solely on the basis of the pricing assumptions
attached hereto as Schedule III, and otherwise shall utilize the same
methodology as was used in calculating the Closing Date Rent Factors. The Owner
Participant shall deliver a certificate to the Lessee setting forth such revised
schedules of Rent Factors certifying that such schedules were calculated in
accordance with this Section 3.3(a)(ii). At the request of the Lessee, the
accuracy of any such calculation shall be subject to confirmation by an
independent accounting firm selected by the Lessee and reasonably acceptable to
the Owner Participant, with the fees and expenses of such firm paid by the
Lessee (unless the net present value of such adjustments to the Closing Date
Rent Factors differ from such adjustments as calculated by such firm by more
than 10 basis points (using a discount rate equal to 4.00%), in which case the
Owner Participant shall pay such fees and expenses).
Notwithstanding
the foregoing, no such adjustments to the Rent Factors shall take effect without
the prior written consent of the Lessee, it being understood that if the Lessee
has not provided such consent on or prior to a proposed Funding Date, such
Funding Date shall be postponed until such consent has been given or the
Commitment of the Owner Participant in respect of the Vehicle for which the
adjustment has been proposed has been terminated as provided in Section 2.9 of
the Participation Agreement.
(b) Adjustments
for TRAC Amounts.
On (i) the Termination Date in respect of any Vehicle or, in the case of
terminations pursuant to Section 13.1(a) occurring in the final Rent Period of
the Base Term, at the end of the Base Term or, in the case of any Vehicle sold
pursuant to Section 13.1(c) during a Renewal Term, on the Renewal Settlement
Date therefor, the TRAC Amount with respect to such date shall be added to and
constitute a portion of the installment of Basic Rent due and payable thereon.
Without limiting the foregoing, the Lessee’s obligations hereunder shall not
terminate with respect to a Vehicle until all amounts due and owing for such
Vehicle (including the portion of the installment of Basic Rent which
constitutes the TRAC Amount, any amount of Supplemental Rent and the Net Sales
Proceeds with respect to such Vehicle) are paid in full.
(c) Offset
Adjustments.
If an adjustment to Basic Rent pursuant to Section 3.3(b) results in a negative
amount of Basic Rent due on such date, then the Lessee shall (and is hereby
authorized by the Lessor to) subtract the absolute value of such negative amount
from the Net Sales Proceeds otherwise payable to the Lessor on such Rent Payment
Date and retain such amount for its own account. If any Unsold Vehicle has been
remarketed or sold pursuant to Section 14.2(d) and Lessee has paid all amounts
due hereunder to the Lessor, the Net Sales Proceeds of such Vehicle shall be
distributed as provided in Section 14.2(f).
3.4 Supplemental
Rent.
The Lessee also agrees to pay to the Lessor, or to whomever shall be entitled
thereto, from time to time any and all Supplemental Rent, promptly as the same
shall become due and owing. The Lessee shall also pay, to the fullest extent
permitted by applicable law, on demand, as Supplemental Rent, interest at a rate
per annum
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equal to
the Overdue Payment Rate on any overdue payment of Rent from (and including) the
date otherwise due hereunder or under any other Operative Document until (but
excluding) the date the same shall be paid.
3.5
Payments.
All payments of Rent due to the Lessor shall be paid to the Lessor at its
account specified in Schedule I to the Participation Agreement on the date due
in immediately available funds which shall be legal tender for the payment of
public and private debts in the United States of America not later than 12:00
noon, New York time, at the place of payment, or at such other account at a
commercial bank in the United States as the Lessor shall specify to the Lessee
on at least four Business Days’ prior written notice. All payments of
Supplemental Rent due to the Owner Participant or the Nominee shall be paid to
the Owner Participant or the Nominee, as applicable, at its account specified in
Schedule I to the Participation Agreement on the date due in immediately
available funds which shall be legal tender for the payment of public and
private debts in the United States of America not later than 12:00 noon, New
York time, or at such other account at a commercial bank in the United States as
the Owner Participant or the Nominee, as applicable, shall specify to the Lessee
on at least four Business Days’ prior written notice.
SECTION
4. DISCLAIMER
OF WARRANTIES
4.1
Disclaimer
of Warranties.
(a) THE LESSOR LEASES AND THE LESSEE TAKES THE VEHICLES “AS IS, WHERE IS” AND
“WITH ALL FAULTS,” IN WHATEVER CONDITION THEY MAY BE. THE LESSEE REPRESENTS,
WARRANTS, ACKNOWLEDGES AND AGREES THAT (i) EACH VEHICLE IS THE SIZE, DESIGN, AND
MANUFACTURE SELECTED BY THE LESSEE OR ON BEHALF OF THE LESSEE, (ii) THE LESSEE
IS SATISFIED THAT EACH VEHICLE IS SUITABLE FOR ITS PURPOSES, (iii) NEITHER THE
LESSOR NOR THE OWNER PARTICIPANT IS A MANUFACTURER OF OR A DEALER IN VEHICLES,
(iv) EACH VEHICLE IS LEASED HEREUNDER IN THE STATE AND CONDITION WHEN THE SAME
FIRST BECAME OR BECOMES SUBJECT TO THIS LEASE, WITHOUT REPRESENTATION OR
WARRANTY OF ANY KIND BY THE LESSOR, THE OWNER PARTICIPANT OR THE NOMINEE,
EXPRESS OR IMPLIED, AS TO THE VALUE, TITLE, MERCHANTABILITY, COMPLIANCE WITH
SPECIFICATIONS, CONDITION, DESIGN, OPERATION, FITNESS FOR ANY PARTICULAR
PURPOSE, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, ABSENCE OF LATENT
DEFECTS OR FITNESS FOR USE OF THE COMPONENT PARTS THEREOF OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
VEHICLE OR THE FLEET, IT BEING AGREED THAT ALL RISKS INCIDENT TO THE FOREGOING
SHALL BE BORNE BY THE LESSEE AND THAT NEITHER THE LESSOR NOR THE OWNER
PARTICIPANT NOR THE NOMINEE SHALL HAVE ANY LIABILITY OR RESPONSIBILITY WITH
RESPECT THERETO; except
that the
Lessor represents and warrants that on each Funding Date, it shall have received
whatever ownership interest in each Vehicle being subjected to this Lease as was
conveyed to it on such Funding Date free and clear of all Lessor’s
Liens.
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(b) Without
limiting the generality of the foregoing, neither the Lessor, the Owner
Participant, the Nominee, nor any of their respective successors or assigns,
shall have any responsibility to the Lessee or any other Person with respect to
any of the following:
(i) any
liability (including without limitation, any theory in torts), loss or damage
caused or alleged to be caused directly or indirectly by any Vehicle or by any
inadequacy or condition thereof or deficiency or defect therein or by any other
circumstances in connection therewith;
(ii) the use,
operation or performance of any Vehicle or any risk relating
thereto;
(iii)
any
interruption of service, loss of business or anticipated profits or
consequential, special, incidental or indirect damages; or
(iv) the
delivery, operation, servicing, maintenance, repair, improvement or replacement
of any Vehicle.
(c) The
provisions of this Section 4.1 have been negotiated and, except as otherwise
expressly provided in the Operative Documents, the foregoing provisions are
intended to be a complete exclusion and negation of any representations or
warranties by the Lessor, the Owner Participant or the Nominee, express or
implied, with respect to each such Vehicle, whether arising pursuant to the
U.C.C. or any other law now or hereafter in effect, or otherwise. Nothing
contained herein shall in any way diminish or otherwise affect any right the
Lessee may have with respect to any such Vehicle against any third person which
is not an Indemnified Person. Neither the Lessor, the Owner Participant nor the
Nominee shall at any time be required to inspect such Vehicle, nor shall any
inspection by the Lessor or the Owner Participant be deemed to affect or modify
the provisions of this Section 4.1. The Lessee acknowledges that it has selected
each Vehicle on the basis of its own judgment, that it has not relied on any
statements, representations or warranties of the Lessor, the Owner Participant
or the Nominee as to any thereof, and that neither the Lessor, the Owner
Participant nor the Nominee is a manufacturer of, or dealer in, Vehicles. The
Lessee’s delivery of a Funding Date Lease Supplement shall be conclusive
evidence, as between the Lessee, on the one hand, and the Lessor, the Owner
Participant or the Nominee, on the other hand, that the Vehicles described
therein are in all respects satisfactory to the Lessee.
4.2
Certain
Agreements.
As provided in each Bill of Sale, the Lessee shall have assigned all Warranties
to the Lessor as of the related Funding Date. The Lessor hereby authorizes the
Lessee, at the Lessee’s expense, so long as an Event of Default shall not have
occurred and be continuing, to assert any and all claims, and to prosecute any
and all suits, actions and proceedings, in its own name or in the name of the
Lessor or the Nominee on behalf of the Lessor (provided that the
indemnities under Sections 5.1 and 5.2 of the Participation Agreement shall
apply thereto), at the Lessee’s expense, and to receive any amounts payable to
the Lessor or to the Nominee, in respect of any warranties or undertakings,
express or implied, relating to any of the Vehicles from any Manufacturer, or
any contractor or subcontractor (including any equipment or parts supplied
therewith) (herein “Warranties”), provided that (x)
after the occurrence of an Event of Default, such authorization shall terminate,
and the Lessor
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may assert and enforce, at the Lessee’s sole cost and
expense, such claims, suits, actions and proceedings, and (y) at the time the
Lessee receives the proceeds of any such claims, suits, actions and proceedings,
and so long as no Event of Default shall have occurred and be continuing, the
Lessee is authorized to retain all such proceeds subject to the Lessee’s
continued compliance with its maintenance and repair obligations pursuant to
Sections 7.4 and 14.3; it being the intention of the Lessor and the Lessee that
all such proceeds be applied to the repair and maintenance of the Vehicle (or
the reimbursement of the Lessee for the same) to the extent necessary to restore
any diminution in value of the Vehicle which gave rise to such claims, suits,
actions and proceedings. If an Event of Default exists at the time such proceeds
are received by the Lessee, such proceeds shall be promptly paid over to the
Lessor. The Lessor shall make reasonable efforts to cooperate with the Lessee in
order to enable the Lessee to assert any such claim and prosecute any such suit,
action or proceeding; provided,
however, that
the Lessor and the Owner Participant shall be fully indemnified by the Lessee
against all liabilities, costs and expenses, including attorneys’ fees and
expenses incurred in connection therewith or resulting
therefrom.
SECTION
5. LIENS
5.1
Restrictions
on Lessee.
(a) The Lessee will not directly or indirectly create, incur, assume or permit
or suffer to be created or to exist, and will promptly discharge, at its own
expense, any Lien or Judgment with respect to any Vehicle, the Lessor’s Estate,
title thereto, any proceeds from the sale thereof or any interest therein,
except Permitted Liens.
(b) Except as
otherwise permitted or required by this Lease or any other Operative Document,
including, without limitation, pursuant to Section 12, the Lessee shall not sell
or otherwise dispose of any Vehicle during the Lease Term in respect
thereof.
(c) The
Lessee, at its own expense, will warrant and defend the Lessor’s title to and
security interest in any Vehicle, the Lessor’s Estate, or any right or interest
therein, against all third parties claiming by, through or under the Lessee,
except to the extent such claims constitute Permitted Liens. The Lessee shall
promptly, at its own expense, take such action as may be necessary to discharge,
eliminate or bond in a manner that is satisfactory to the Lessor any such Lien
(other than Permitted Liens) if the same should arise at any time. The Lessee
further agrees that, except for any period during which payment is excused under
this Section 5, it shall pay or cause to be paid on or before the time or times
when due, and prior to the accrual of any penalty, all taxes, assessments, fees
or charges imposed on the Lessee (or any Affiliate or related group of which the
Lessee is a member) under the laws of any jurisdiction that, if unpaid,
reasonably could be expected to result in a Lien (other than a Permitted Lien)
on any Vehicle, the Lessor’s Estate, title thereto, any proceeds from the sale
thereof or any interest therein. The Lessee agrees, promptly upon obtaining
knowledge thereof, to give the Lessor notice of any Lien which the Lessee is
obligated to discharge pursuant to this Section 5.
5.2
Permitted
Contests.
(a) After prior notice to the Lessor, the Lessee may at its expense contest, by
appropriate proceedings conducted in good faith and with due diligence, any Lien
permitted to be contested under clause (c) and (d) of the definition of
Permitted Liens or Judgment which the Lessee would otherwise be obligated to
discharge or pay pursuant to Section 5.1 hereof, provided that (i)
adequate bonding has been made for the payment of such Lien or
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Judgment, (ii) such proceedings do not, in the good
faith opinion of the Lessor, involve any material risk of sale, forfeiture or
loss of the assets subject to such Lien or Judgment or any civil or criminal
liability to the Lessor, the Bank, the Nominee or the Owner Participant and
(iii) the failure of the Lessee to discharge or pay such Judgment or Lien
pending the contest thereof shall not, in the good faith opinion of the Lessor,
have a material adverse effect on (x) the condition or operations of the Fleet
or (y) the interests (including, without limitation, the security interest
granted to the Lessor pursuant to Section 17) of the Lessor or the Owner
Participant.
(b) The
Lessor shall make reasonable efforts, at the Lessee’s cost and expense, to
cooperate with the Lessee in order to enable the Lessee to assert any claim and
prosecute any suit, action or proceeding relating to any Judgment or Lien which
the Lessee is permitted to contest pursuant to Section 5.2(a). If the Lessee
does not have standing to contest any such Judgment or Lien but the Lessor has
such standing, then the Lessor, at the Lessee’s request and expense, so long as
no Event of Default or Specified Default shall have occurred and be continuing,
shall make reasonable efforts to contest the same as directed by the Lessee.
Without limiting the generality of the foregoing, so long as no Event of Default
or Specified Default shall have occurred and be continuing, the Lessor shall
make reasonable efforts to (i) at the Lessee’s cost and expense, if requested by
the Lessee, join in any proceedings or litigation to which the Lessor is either
(A) the real party in interest or (B) a necessary party, (ii) notify the Lessee
within 15 days of the receipt of any correspondence or notification, formal or
informal, from any court or other Person with respect to the Vehicles or the
transactions contemplated hereby (provided the failure to so notify the Lessee
shall not affect the Lessee’s obligations hereunder), and (iii) pay or timely
discharge (to the extent of the funds provided therefor by the Lessee) or,
subject to the provisions of Section 5.1 or 5.2(a), refrain from paying or
discharging, any such contested Judgment or Lien (and interest thereon) if, in
the opinion of independent counsel for the Lessee reasonably acceptable to the
Lessor, the nonpayment or nondischarge, or the payment or discharge, thereof (as
the case may be) would or could adversely affect either the litigation of the
contested matter or the choice of forum in which the Lessee desires to contest
such matter.
(c) Without
duplication of any payment made by the Lessee pursuant to Section 5.1 or 5.2 of
the Participation Agreement and excluding all Taxes, the Lessee will pay, and
save the Lessor, the Nominee and the Owner Participant harmless against, all
losses, liabilities (including liabilities for penalties), judgments, damages,
writs, warrants, decrees, awards and costs, including reasonable attorneys’ fees
and expenses, in connection with any contest conducted pursuant to this Section
5.2 and will, promptly after the final determination of such contest, pay and
discharge the amounts which shall be imposed or determined to be payable
therein, together with all penalties, costs and expenses incurred in connection
therewith.
SECTION
6. QUIET
ENJOYMENT
So long
as no Event of Default has occurred and is continuing, the Lessor agrees that it
will not take or cause or authorize any Person to take any affirmative action to
prevent the Lessee from having quiet and peaceable possession and enjoyment of
each Vehicle during the Lease Term in respect thereof in accordance with the
provisions of this Lease except as expressly provided in this Lease or any other
Operative Document.
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SECTION 7. OPERATION
AND MAINTENANCE;
SUBLEASING
7.1
Vehicle
Records.
The Lessee at its cost and expense shall maintain, or cause to be maintained, on
a current basis, records which shall contain (a) the Specific Identification of
each Vehicle, (b) a copy of the Manufacturer’s factory invoice for each Vehicle
and (c) the certificate of title and registration for each Vehicle, it being
understood that the certificates of title will be held by the Nominee in
accordance with the Nominee Agreement. The Lessee agrees that it will keep the
Lessor named as a secured party on the certificate of title to each Vehicle and
will take all such other actions and file such documents and instruments as are
necessary or reasonably requested by the Lessor to maintain the Lessor’s
ownership of and perfected first priority security interest in each Vehicle, it
being understood that title shall be in the name of the Nominee as stated in
Section 7.2(a).
7.2
Title
to Remain in Nominee; Vehicle Management; Location of Vehicles.
(a) During the period of the Lease Term with respect to any Vehicle, except as
expressly provided herein, the Lessee acknowledges and agrees that title to each
Vehicle shall at all times remain in the name of the Nominee (who shall be
acting pursuant to the Nominee Agreement and shall be holding title for the
benefit of the Lessor). At all times during the Lease Term, the Lessee at its
cost and expense will, as the agent for the Nominee and the Lessor, properly
register and reregister, or cause to be registered or reregistered, when
necessary under applicable law the Vehicles in the name of the Nominee. The
Nominee shall hold (either directly or through an agent acceptable to the Owner
Participant) all certificates of title; provided,
however, that if
a Trigger Event or an Event of Default under Section 10(a), (b), (e), (f) or (g)
shall have occurred and be continuing or the unsecured debt of the Guarantor
shall cease to be rated at least investment grade by either Moody’s or S&P,
then the Nominee shall promptly deliver, or cause to be delivered, all
certificates of title to the Lessor. Each Vehicle shall at all times be titled
in the name of the Nominee, with the name of the Lessor noted therein as first
lienholder (or application for the Lessor to be so named shall be pending) and
registered in the State of Oklahoma. Notwithstanding the foregoing, the Lessee
may change the state in which any Vehicle is titled or registered, provided that
titling or registration in such state will not cause violation of any law, rule
or regulation of any Governmental Body by the Lessee, the Lessor, the Nominee or
the Owner Participant or in and of itself require the Owner Participant to be
licensed or qualified in such state, and provided,
further, that
the Lessee shall deliver to the Lessor three (3) Business Days prior to the
effective date of such change a certificate of a Responsible Officer certifying
that the Lessee (i) has or shall promptly (but in any event the Lessee shall
within 30 days make application to) reregister or retitle, respectively, such
Vehicle in the name of the Nominee and, in the case of retitling, noting the
security interest of the Lessor, in such new state and (ii) has done and
performed any other act and executed any and all further instruments required by
law, rule or regulation or reasonably requested by the Lessor for the purpose of
protecting the Nominee’s title (for the benefit of the Lessor) in the Vehicles
and the Lessor’s perfected security interest in such Vehicle. If requested by
the Lessee, immediately upon Lessor’s satisfaction and receipt of the
certification specified in the immediately preceding sentence, the Lessor shall
deliver, and shall consent to delivery by the Nominee of, powers of attorney to
the Lessee to permit the Lessee to take the actions set forth in clause (i)
above.
(b) The
Lessor and the Lessee agree that it is intended that the Lessor is the owner of
the Vehicles and, as owner of the Vehicles, shall be entitled to all federal,
state and
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local
income tax benefits attributable to ownership of the Vehicles. Each of the
Lessee and the Lessor agrees that it shall not take any position on its federal,
state or local income tax returns inconsistent with the parties’
intent.
(c) Except as
otherwise expressly limited by this Lease, the Lessee shall have the exclusive
right to use the Vehicles in any lawful manner consistent with the terms and
conditions of this Lease and the other Operative Documents and the Lessee is
hereby designated, during the Lease Term and absent an Event of Default, as the
lawful representative of the Lessor or the Nominee, and as the Lessor’s agent,
in all dealings with the Manufacturers in connection with the Vehicles,
including as provided in Section 4.2 hereof (subject always to the provisions of
the Nominee Agreement) and, subject to Sections 7.1 and 7.2(a), in registering
Vehicles for operation under the laws of any jurisdiction which has authority
over the acquisition, ownership, possession, utilization or sale of the
Vehicles, provided that the
Lessee is not authorized to act as the lawful representative of the Lessor or
the Nominee in a manner which would constitute a violation of this Lease or any
other Operative Document or any law, rule or regulation of any Governmental
Body.
(d) During
the Lease Term with respect to any Vehicle, the Lessee shall not permit such
Vehicle to be maintained or located outside of the continental United States or
Hawaii, other than in connection with incidental use by a rental customer of
Lessee in the ordinary course of its business. Lessee shall use, register or
title the Vehicles only in a manner which complies with all laws, ordinances,
governmental rules and regulations and will not use the Vehicles in any manner
which will expose the Lessor, the Owner Participant or the Nominee to any civil
or criminal liability or in and of itself require the Owner Participant to be
licensed or qualified in any jurisdiction.
7.3
Subleasing.
(a) Unless a Trigger Event shall have occurred and be continuing, the Lessee
shall have the right, with respect to any Vehicle, to enter into mini-leases
(rentals of up to thirty (30) days), other similar leases and rentals entered
into in the ordinary course of the Lessee’s rental business (“Permitted Use
Agreements”); provided no
Permitted Use Agreement shall contain any purchase option. No such lease or
rental shall reduce the Lessee’s obligations hereunder or under any other
Operative Document. EXCEPT AS PROVIDED HEREIN AND IN SECTION 5.4 OF THE
PARTICIPATION AGREEMENT, LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, SUBLEASE,
CONVEY, PLEDGE, MORTGAGE OR OTHERWISE ENCUMBER ITS OR LESSOR’S INTEREST IN AND
TO THE LEASE OR ANY OF THE VEHICLES AND ANY SUCH SALE, TRANSFER, ASSIGNMENT,
SUBLEASE, CONVEYANCE, PLEDGE, MORTGAGE OR ENCUMBRANCE, WHETHER BY OPERATION OF
LAW OR OTHERWISE, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, SHALL BE NULL AND
VOID.
(b) In
connection with a sale of the business of the Lessee pursuant to Section 5.4 of
the Participation Agreement, the Lessee shall have the right to assign all of
its rights and obligations under this Lease consistent with such
provisions.
7.4
Maintenance
of the Vehicles.
The Lessee, at its own expense, (a) will cause the Vehicles to be maintained in
the condition when first delivered new from the Manufacturer thereof subject to
normal wear and tear, (b) will cause the Vehicles to be maintained in
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accordance with customary industry standards and in
all events in a non-discriminatory manner with the standards the Lessee or its
Affiliates use in the maintenance of similar vehicles owned or leased by it, and
in good working order and repair, (c) will comply with all governmental rules
and regulations applicable to the titling, registration, use, repair,
maintenance, operation and rental of the Vehicles (including obligations of the
Lessor or the Nominee to become licensed as a dealer or vehicle lessor under
applicable law), and (d) will comply with all Manufacturer’s instructions,
standards and guidelines and all insurance standards applicable, if any, to the
maintenance and operation of the Vehicles.
SECTION
8. INSURANCE
Lessee
shall obtain and maintain with respect to all Vehicles that are subject to this
Lease (a) vehicle liability insurance to the full extent required by law and in
any event not less than $500,000 per Person and $3,000,000 per occurrence, (b)
property damage insurance with a limit of $1,000,000 per occurrence, and (c)
excess coverage public liability insurance with a limit of not less than
$50,000,000 or the limit maintained from time to time by the Lessee at any time
hereafter, whichever is greater, with respect to all Vehicles comprising the
Fleet. The Lessor acknowledges and agrees that the Lessee may, to the extent
permitted by applicable law, self-insure for the first $3,000,000 per occurrence
of vehicle liability and property damage which is otherwise required to be
insured hereunder. All such policies shall be from financially sound and
reputable insurers, shall name the Lessor, the Nominee and the Owner Participant
and their successors and assigns as a named additional insured, in the case of
catastrophic physical damage insurance on such Vehicles, shall name Owner
Participant as lender loss payee as its interest may appear and will provide
that the Lessor, the Nominee and the Owner Participant and their successors and
assigns shall receive at least 30 days’ prior written notice of cancellation or
material change of such policies. The Lessee will notify promptly the Lessor of
any curtailment or cancellation of the Lessee’s right to self-insure in any
jurisdiction.
Each
policy referred to in this Section 8 shall provide that (1) the interests of the
Lessor and the Owner Participant shall not be invalidated by any act or
negligence of, or breach of representation or warranty by, the Lessee or any
Person having an interest in the Vehicles (other than the Lessee’s failure to
pay premiums), (2) such insurance is primary with respect to any other insurance
carried by or available to the Lessor or the Owner Participant, (3) the insurer
shall waive any right of subrogation, setoff, counterclaim, or other deduction,
whether by attachment or otherwise, against the Lessor and the Owner
Participant, (4) the insurer shall waive any right to claim any premiums or
commission against the Lessor and the Owner Participant, and (5) such policy
shall contain a severability of interests clause providing for coverage of the
Lessor and the Owner Participant as if separate policies had been issued to each
of them except with respect to the limit of such insurance which shall in no
event increase as a result of such additional language. Nothing in this Section
8 shall prohibit the Lessor and the Owner Participant from obtaining insurance
for its own account and at its own expense and any proceeds payable thereunder
shall be payable as provided in the insurance policy relating
thereto.
The Lessee shall provide or cause to be provided on
the Closing Date, and at each policy renewal, certificates issued by the
insurer(s) or insurance broker(s) for the insurance maintained pursuant to this
Section 8; provided,
however, that if
the delivery of any certificate is delayed, the Lessee shall not be deemed to be
in violation of the obligation to deliver such
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10
certificate
if, within a 30 day period, the Lessee delivers an executed binder with respect
thereto and thereafter delivers the certificate upon receipt thereof. In any
event (not less frequently than once in any 12-month period), the Lessee shall
send or cause to be sent certificates evidencing the insurance required under
this Section 8 to the Lessor and the Owner Participant.
In the
event that the Lessee shall fail to maintain or cause to be maintained insurance
as herein required, the Lessor or the Owner Participant may at its sole option
provide such insurance and, in such event, the Lessee shall, upon demand,
reimburse the Lessor or the Owner Participant, as applicable, as Supplemental
Rent, for the cost thereof.
Nothing
contained in this Section 8 shall modify or limit in any respect the rights and
indemnities of the Lessor, the Nominee and the Owner Participant, or the
obligations of the Lessee set forth in Section 12 hereof and in Sections 5.1 and
5.2 of the Participation Agreement.
SECTION
9. INSPECTION
The
Lessor or any authorized representative may, upon not less than three Business
Days’ notice (five Business Days in the case of clause (b); unless, in the
case of either clause (a) or (b), an Event of Default shall have occurred and be
continuing, in which case upon not less than 12 hours notice), (a) enter the
premises of the Lessee or any Affiliate who has possession of any Vehicle, at a
reasonable time and during normal business hours, in order to inspect the
Vehicles (subject to the availability thereof for inspection) and to inspect,
audit and make copies of all documents and instruments in the possession of the
Lessee or such Affiliate which relate to the manufacture, delivery, use,
maintenance, repair, exchange or disposition of Vehicles and which are
reasonably necessary for the Lessor or any such authorized representative to
determine the truth and accuracy of any schedule, annex, exhibit or
representation delivered or made hereunder or under the Operative Documents to
the Lessor or any authorized representative or compliance by the Lessee with any
of the agreements contained herein or in the Operative Documents and (b)
discuss, at a reasonable time and during normal business hours, the condition
and performance of the Vehicles with a Responsible Officer of the Lessee or any
Affiliate who has possession of any Vehicles, and the Lessee agrees to take such
reasonable and customary steps as are appropriate to facilitate such inspections
and discussions; provided,
however, that
the foregoing shall not require the Lessee to permit the inspection, auditing or
copying of any document or instrument, the inspection of any property (other
than the Vehicles) or operation or the furnishing of any information by any
Person to an extent which would require disclosure of any of the Lessee’s trade
secrets (provided that, in no event shall “trade secrets” include information
that has been agreed to be provided pursuant to any of the Operative Documents).
The Lessee agrees that any documents required to be maintained pursuant to the
Operative Documents shall be so maintained at the offices of the Lessee. The
Lessee shall notify the Lessor promptly upon request of the location of the
specific office of the Lessee at which any such documents are
maintained.
SECTION
10. EVENTS OF
DEFAULT
Each of
the following events shall constitute an “Event of Default” (whether any such
event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule
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11
or regulation of any administrative or governmental officer, commission,
authority, body or agency or otherwise):
(a) default
in the payment of any installment of Basic Rent or Renewal Rent (including,
without limitation, any payment pursuant to Sections, 12.2, 13.2 or 14 hereof)
on the date such payment is due and the continuance of any such default for five
Business Days after such payment is due; or
(b) except as
specified in clause (a) above, default in the payment of any monetary obligation
required to be made hereunder or under any other Operative Document and the
continuance of any such default for 30 days after written notice of nonpayment
from the Person entitled to such payment; or
(c) (i)
failure by the Lessee to maintain the insurance required under Section 8;
or
(ii) default
in the performance of any obligation contained, or incorporated by reference, in
Section 5.4 of the Participation Agreement; or
(iii)
default
in the performance in any material respect of any other covenant on the part of
the Lessee or the Guarantor contained herein or in any other Operative Document
and the continuance of any such default for 30 days after the earlier of actual
knowledge thereof by a Responsible Officer of the Lessee or the Guarantor, as
applicable, or written notice to the Lessee or the Guarantor, as applicable,
from the Lessor or the Owner Participant; provided that if such default is
capable of cure but cannot reasonably be cured within such 30 day period, no
Event of Default shall occur so long as the Lessee or the Guarantor is
diligently attempting to cure such default and such default is cured within 90
days of receipt of such notice; or
(d) any
representation or warranty made by the Lessee or the Guarantor herein or in any
other Operative Document (other than the Tax Indemnity Agreement) (or in any
certificate or instrument delivered pursuant to an Operative Document (other
than the Tax Indemnity Agreement)) shall be false or misleading in any
materially adverse respect on the date as of which made; provided that if
such default is capable of cure but cannot reasonably be cured within such 30
day period, no Event of Default shall occur so long as the Lessee or the
Guarantor is diligently attempting to cure such default and such default is
cured within 90 days of receipt of such notice; or
(e) either
(i) the Lessee, the Guarantor or the Nominee shall (A) apply for or consent to
the appointment of a receiver, trustee or liquidator of itself or any of its
property, or commence a voluntary proceeding toward liquidation or dissolution,
(B) make a general assignment for the benefit of creditors, (C) have an order of
relief entered against it in any bankruptcy or insolvency proceeding, (D)
commence any proceeding with respect to itself under any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution of debt,
dissolution or liquidation law or statute, or (E) file an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law or statute or (ii) corporate action shall be taken by the Lessee, the
Guarantor or the Nominee for the purposes of effecting any of the foregoing;
or
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12
(f) (i) any
petition shall be filed or a proceeding commenced against the Lessee, the
Guarantor or the Nominee seeking (A) the adjudication of the Lessee, the
Guarantor or the Nominee as bankrupt or (B) its reorganization or an arrangement
of its debts or its liquidation or dissolution under any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute and (ii) in any such case, such petition or proceeding shall not be
dismissed within 90 days after the filing or commencement thereof as the case
may be; or
(g) any
material obligation of the Guarantor under the Guaranty shall at any time cease
to constitute the legal, valid and binding obligation of the Guarantor or the
Guarantor shall at any time assert the same in writing (or orally during a
judicial proceeding).
SECTION
11. REMEDIES
(a) Upon the
occurrence of an Event of Default and at any time thereafter, so long as the
same shall be continuing, the Lessor may, at its option, by notice given to the
Lessee, declare the Lease to be in default, and at any time thereafter may do
one or more of the following with respect to the Vehicles, the Lessee and/or
this Lease, as the Lessor in its sole discretion shall elect to the extent
permitted by, and subject to compliance with, any mandatory requirements of
applicable law, provided that,
upon the occurrence of an Event of Default specified in Sections 10(e) or (f)
with respect to the Lessee, this Lease shall automatically be in default without
the giving of any notice to the Lessee by the Lessor or the taking of any other
action by the Lessor:
(i) the
Lessor may, by notice to the Lessee, terminate this Lease as to any or all
Vehicles;
(ii) the
Lessor may (A) demand that the Lessee, and the Lessee shall upon the written
demand of the Lessor, promptly return any or all Vehicles, together with the
certificates of title thereto and the other related documents described in
Section 14.2(h) (i), to the Lessor in the manner and condition required by, and
otherwise in accordance with all the provisions of, Sections 7 and 14 as if such
Vehicles were being returned to the Lessor at the end of the Lease Term and the
Lessor shall not be liable for the reimbursement of the Lessee for any costs and
expenses incurred by the Lessee in connection therewith and (B) enter upon the
premises where any Vehicles or the certificates of title thereto shall be
located or reasonably believed to be located and take immediate possession of
(to the exclusion of the Lessee) any Vehicles and the certificates of title
thereto, by summary proceedings or otherwise, all without liability to the
Lessor for or by reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or otherwise, except to
the extent attributable to the Lessor’s gross negligence or willful
misconduct;
(iii)
the
Lessor may sell any Vehicle at public or private sale, as the Lessor may
determine, free and clear of any rights of the Lessee and without any duty to
account to the Lessee with respect to such action or inaction or any proceeds
with respect thereto following any such sale; in which event the Lessee’s
obligation to pay Basic Rent
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13
hereunder for periods commencing after the date of
such sale shall be terminated with respect to the Vehicles
sold;
(iv) the
Lessor may hold, keep idle or lease to others any Vehicle, as the Lessor in its
sole discretion may determine, free and clear of any rights of the Lessee and
without any duty to account to the Lessee with respect to such action or
inaction or for any proceeds with respect to such action or inaction, except
that the Lessee’s obligation to pay Basic Rent with respect to any Vehicle for
periods commencing after the Lessee shall have been deprived of use of such
Vehicle pursuant to this paragraph (iv) shall be reduced by the net proceeds, if
any, received by the Lessor from leasing such Vehicle to any Person other than
the Lessee for the same period or any portion thereof;
(v) the
Lessor may demand, by written notice to the Lessee specifying a payment date
which shall be a Rent Payment Date (the “Remedy Payment Date”) not less than
five Business Days after such notice is given, that the Lessee pay to the
Lessor, and the Lessee shall pay to the Lessor on such Remedy Payment Date, the
sum of: (A) accrued and unpaid Rent (including Supplemental Rent) then due to
the Lessor, plus (B) any additional damage and reasonable expenses which the
Lessor shall have sustained by reason of the Lessee’s default hereunder
including, without limitation, reasonable expenses incurred in the seizure,
storage, repair, refurbishing, rental, sale of the Vehicles and/or in the
enforcement of any right or privilege hereunder, including reasonable attorneys’
fees, if any, plus (C) whichever of the following amounts the Lessor, in its
sole discretion, shall specify, as liquidated damages for loss of the bargain
and not as a penalty (and in lieu of Basic Rent accruing after the Remedy
Payment Date): (1) an amount equal to the Termination Value determined as of
such date in respect of all Vehicles then subject to the Lease, and, in this
event, upon full payment by the Lessee of all Rent, the Lessor shall transfer to
the Lessee or its designee, on an “as-is where-is, with all faults” basis
without recourse or warranty, all of the Lessor’s right, title and interest, if
any, in and to the Vehicles remaining subject to this Lease; or (2) an amount
equal to the excess, if any, of such Termination Value determined as of such
date in respect of all Vehicles then subject to the Lease over the Fair Market
Sales Value of such Vehicles as of the Remedy Payment Date. Upon the payment of
the foregoing amounts by the Lessee, this Lease shall terminate;
and
(vi)
the
Lessor may exercise any other right or remedy that may be available to it under
applicable law or proceed by appropriate court action to enforce the terms
hereof or to recover damages, costs, charges and expenses (including reasonable
attorneys’ fees) for the breach hereof.
(b) [Intentionally
omitted].
(c) (i)
Except as expressly provided herein, none of the remedies under this Lease is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to in this Lease or otherwise available to the Lessor at
law, in equity or by statute and each and every right, power and remedy whether
specifically given herein or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Lessor. No
delay or omission by the Lessor in the exercise of any
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14
right,
power or remedy shall be construed to be a waiver of any default on the part of
the Lessee or to be an acquiescence therein. No express or implied waiver by the
Lessor of any Default or Event of Default shall in any way be, or be construed
to be, a waiver of any future or subsequent Default or Event of Default. To the
extent permitted by applicable law, the Lessee hereby waives any rights now or
hereafter conferred by statute or otherwise that may require the Lessor to sell,
lease or otherwise use the Vehicles or any part thereof in mitigation of the
Lessor’s damages upon the occurrence of an Event of Default or that may
otherwise limit or modify any of the Lessor’s rights or remedies under this
Section 11. Any repossession, return or subsequent sale or lease by the Lessor
of any Vehicle or part thereof shall not bar an action for a deficiency for any
portion of the Termination Value or unpaid Rent not collected by the Lessor as a
result of such sale or lease and the bringing of an action or the entry of
judgment against the Lessee and shall not bar the Lessor’s right to repossess
any or all other Vehicles. The exercise or beginning of exercise by the Lessor
of any one or more such remedies shall not preclude the simultaneous or later
exercise by the Lessor of any or all such other remedies. THE LESSEE WAIVES ANY
AND ALL RIGHTS TO NOTICE AND TO A JUDICIAL HEARING WITH RESPECT TO THE
REPOSSESSION OF ANY VEHICLE BY THE LESSOR UPON AN EVENT OF DEFAULT (it being
understood that this waiver does not affect any rights to notice expressly
granted to the Lessee under the Operative Documents).
(ii) No
termination of this Lease under Section 11(a), in whole or in part, or
repossession of any Vehicles or exercise of any remedy under Section 11(a)
shall, except as specifically provided therein, relieve the Lessee of any of its
liabilities and obligations under this Lease. In addition, the Lessee shall be
liable, except as otherwise provided above (without duplication of amounts
payable hereunder), for any and all unpaid Rent due before, after or during the
exercise of any of the foregoing remedies and for all reasonable legal fees and
other costs and expenses (including fees of the Appraiser in determining the
Fair Market Sales Value for purposes of Section 11(a)(v)(C)(2)) incurred by the
Lessor and the Owner Participant by reason of the occurrence of any Event of
Default or the exercise of the Lessor’s remedies with respect thereto including
all costs and expenses incurred in connection with the return of the Vehicles in
the manner and condition required by, and otherwise in accordance with the
provisions of, Sections 7 and 14 as if the Vehicles were being returned to the
Lessor at the end of the Lease Term. At any sale of the Vehicles pursuant to
Section 11(a), the Lessor or the Owner Participant may bid for and purchase such
property.
(d) If the
Lessee fails to make any payment of Supplemental Rent hereunder or fails to
perform or observe any other covenant, condition or agreement to be performed or
observed by it hereunder (other than the payment of Basic Rent) the Lessor may,
but shall not be required to, upon written notice to the Lessee, take any action
reasonably calculated to cure the Lessee’s failure and the reasonable costs and
expenses of the Lessor incurred in connection with that action, together with
interest at the Overdue Payment Rate, shall be payable by the Lessee to the
Lessor on written demand.
(e) If
requested by the Lessor during the continuance of an Event of Default, the
Lessee shall cease and desist from using and shall return each of the Powers of
Attorney to the Lessor.
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SECTION
12. EVENT OF
LOSS
12.1
Event
of Loss.
An Event of Loss with respect to any Vehicle shall occur on a date (the “Event
of Loss Date”) which is the earliest of the date which is (a) the earlier of (x)
the Expiration Date and (y) the 180th day, in each case, after the date of the
loss or theft of such Vehicle, if such Vehicle has not been recovered from such
loss or theft by such 180th day or
if recovered, is in a condition that would make clause (b) applicable, (b) the
earlier of (x) the Expiration Date and (y) the date such Vehicle is or becomes,
in the Lessee’s good faith judgment, destroyed or damaged beyond repair or
otherwise rendered permanently unfit for use in the Lessee’s truck rental
operations or (c) the earlier of (x) the Expiration Date and (y) the date that
such Vehicle has been condemned, confiscated or seized by any Governmental Body
or the date which is three months (but in no event beyond the Lease Term for
such Vehicle) after such Vehicle has been requisitioned for use by any
Governmental Body and shall not have been recovered for use in the Lessee’s
truck rental operations (any loss, theft or requisition that so continues and/or
any such destruction or damage and/or any such condemnation, confiscation or
seizure herein called an “Event of Loss”).
12.2
Application
of Payments from Others and Salvage.
(a) Event
of Loss. Subject
to the provisions of Section 12.3, the Lessee shall either (x), (1), in the case
of an Event of Loss occurring on a date which is not an Expiration Date pursuant
to Section 12.1(a) or (c), on the next succeeding Rent Payment Date after the
Event of Loss Date, or (2) in the case of an Event of Loss occurring on a date
which is not an Expiration Date pursuant to Section 12.1(b), on a date,
specified on Schedule B to the relevant Funding Date Lease Supplement, occurring
on or prior to the first such date which is at least 90 days after the
applicable regional sales manager for the Lessee shall have received a completed
accident report with respect to such Vehicle (unless the Lessee shall have given
the Lessor notice prior to the expiration of such ninety (90) day period of its
intention to replace such Vehicle pursuant to clause (y) hereof), or (3) if the
Event of Loss Date is the Expiration Date, the Lessee shall, on the Expiration
Date, pay to the Lessor an amount equal to the sum of (i) the Termination Value
for the Vehicle or Vehicles subject to the Event of Loss, (ii) any Rent due and
payable on such payment date described in clauses (x)(1), (2) or (3), as
applicable, with respect to the Vehicle or Vehicles subject to the Event of
Loss, and (iii) to the extent not theretofore paid, Rent due and payable prior
to (but not on) such payment date described in clauses (x)(1), (2) or (3), as
applicable, or (y) provided no Specified Default or Event of Default shall have
occurred and be continuing, replace the Vehicle suffering the Event of Loss with
another Eligible Vehicle of the same Model Year and Vehicle Type and having a
Fair Market Sales Value not less than the Fair Market Sales Value of the Vehicle
being replaced (assuming for this purpose that such replaced Vehicle had not
suffered the Event of Loss and was in the condition required by the Lease),
which replacement shall be made on or prior to the 30th day
after the notice of replacement has been given, in which case the replacement
Vehicle shall become subject to the Lease and the Rent payable under the Lease
shall not be reduced. Upon payment of the amounts specified in clauses (x)(i),
(ii) and (iii) above, subject to the provisions of Section 12.3, the Lessor
hereby authorizes the Lessee to transfer to the Lessee or the Nominee, acting on
behalf of the Lessee, “as-is, where-is, with all faults,” all right, title and
interest to any insurance proceeds or condemnation proceeds remaining after such
payment and any salvage of the Vehicle subject to such Event of Loss, without
recourse or warranty except for the absence of Lessor’s Liens and without
further action such insurance proceeds, condemnation proceeds and/or salvage
shall cease to be subject to this
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16
Lease. Upon payment of all sums required to be paid
pursuant to clause (x) of this Section 12.2(a) with respect to a Vehicle, the
Lessee’s obligation to pay Basic Rent hereunder with respect to such Vehicle for
any period commencing after the date of the payment of such amounts shall be
terminated.
(b) No
Event of Loss.
Subject to the provisions of Section 12.3, any insurance proceeds, awards or
other payments received from any Person with respect to any Vehicle in
connection with any loss, theft, destruction, damage, condemnation, confiscation
or seizure which does not constitute an Event of Loss pursuant to the provisions
of Section 12.1 shall be paid to the Lessee. If any such proceeds, awards or
other payments are paid with respect to any damage to any Vehicle (or part
thereof), the same shall be applied to repair or replace such Vehicle or part
thereof by or at the direction of the Lessee to the extent required under
Section 7 or, if such damage shall have already been repaired at the Lessee’s
sole cost, to reimburse the Lessee for the cost therefor and the balance, if
any, shall be retained by the Lessee. Subject to Section 12.3, if any payment
payable to the Lessee under this Section 12.2(b) is received by the Lessor or
the Owner Participant, it shall be promptly paid over to the Lessee. Subject to
the provisions of Section 12.3, the Lessor hereby authorizes the Nominee to
transfer to the Lessee or the Nominee, acting on behalf of the Lessee, on an
“as-is, where-is, with all faults” basis, all right, title and interest to any
salvage removed from any Vehicle in connection with any event not constituting
an Event of Loss and not required in connection with the repair or restoration
of such Vehicle without recourse or warranty except for the absence of Lessor’s
Liens, and any salvage so transferred shall, without further action, cease to be
subject to this Lease.
(c) Except as
otherwise provided in Section 12.2(a), the Lessee shall not be released from its
obligations hereunder in the event of, and shall bear the risk of, any Event of
Loss to, or other loss, change, or partial destruction of, any Vehicle during
the Lease Term and thereafter until all of the Lessee’s obligations hereunder
are fully performed.
12.3
Application
of Payments During the Existence of an Event of Default.
Any amount (including insurance and condemnation proceeds) or salvage referred
to in Section 12.2 which would otherwise be payable or transferable to the
Lessee shall not be paid or transferred to the Lessee, or if paid to the Lessee,
shall promptly be remitted to the Lessor, if at the time of such payment or
transfer a Specified Default or an Event of Default shall have occurred and be
continuing, but shall be held by the Lessor as security for the obligations of
the Lessee under the Lease and applied to such obligations at such time and in
such manner as the Lessor may reasonably determine. All such remaining amounts
not otherwise applied by the Lessor pursuant to the preceding sentence and
salvage shall promptly be distributed to the Lessee.
SECTION
13. EARLY
TERMINATION
13.1
Early
Termination.
(a) Provided no Event of Default shall have occurred and be continuing,
during the Base Term for any Vehicle the Lessee may irrevocably elect to
terminate this Lease with respect to any Vehicle which it has determined to be
economically obsolete or surplus to its requirements on a Rent Payment Date, or,
during the final Rent Period of the Base Term, on any Business Day (the date so
elected, an “Early Termination Date”) by providing the Lessor with notice in
writing not later than 3:00 p.m., New York time, on the fifth Business Day prior
to such Early Termination Date, such notice to include (a) the Early
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17
Termination Date, (b) the applicable Termination
Value of the Vehicles as to which the Lease is to be terminated, and (c) a
certification from a Responsible Officer of the Lessee that such Vehicles are
economically obsolete or surplus to its requirements.
(b) The
Lessee may irrevocably elect to terminate this Lease with respect to and
purchase all, but not less than all, of the Vehicles effective upon the
consummation of a sale or a merger or consolidation of, or sale of all or
substantially all of the assets of, either (i) the business of the Lessee as
contemplated by Section 5.4 of the Participation Agreement (the date of such
termination, a “Lessee Sale Termination Date”), or (ii) the business of the
Guarantor as contemplated by Section 2.9 of the Guaranty (the date of such
termination, a “Guarantor Sale Termination Date”, and together with the Lessee
Sale Termination Date, each a “Sale Termination Date” ), in the case of either
(i) or (ii) by providing the Lessor with a preliminary notice in writing not
later than 3:00 p.m., New York time, on the third Business Day prior to such
Sale Termination Date, such notice to include (a) the proposed Sale Termination
Date and (b) a preliminary estimate of the Fair Market Sales Value and the
Termination Value as of such date for all the Vehicles. In addition, no later
than 1:00 p.m., New York time, on the Business Day immediately preceding the
Sale Termination Date, the Lessee shall give written notice to the Lessor which
states (a) the Sale Termination Date and (b) the Fair Market Sales Value and the
Termination Value as of such date for all the Vehicles. On the Sale Termination
Date the Lessee shall pay to the Lessor the sum of (i) the higher of the Fair
Market Sales Value or the Termination Value for all of the Vehicles, (ii) any
Rent due and payable on such Sale Termination Date and (iii) to the extent not
theretofore paid, Rent due and payable prior to (but not on) such Sale
Termination Date.
(c) During
the Renewal Term for any Vehicle the Lessee may irrevocably elect to terminate
this Lease with respect to any Vehicle on any date during such Renewal Term and
sell such Vehicle (in accordance with Section 13.2) (any date so elected, the
“Renewal Sale Date”). The Lessee shall provide notice (a “Renewal Term Sale
Notice”) to the Lessor in writing not later than 3:00 p.m., New York time,
on the tenth Business Day prior to the last Business Day of each month occurring
during the Renewal Term (such date, the “Renewal Settlement Date”), such notice
to include (i) the Renewal Settlement Date and (ii) the applicable Termination
Value of any Vehicles which have been so sold in the period commencing on the
date of the Renewal Term Sale Notice immediately preceding the most recent
Renewal Term Sale Notice (or the commencement of the Renewal Term, if no earlier
Renewal Term Sale Notice has been given) and ending on the date of the most
recent Renewal Term Sale Notice, and as to which the Lease is to be terminated.
13.2
Remarketing
of Vehicles.
(a) Remarketing
Agent. The
Lessor hereby appoints the Lessee, and the Lessee hereby agrees to act, as the
exclusive Remarketing Agent for the Lessor with respect to all of the Vehicles
specified in any notice described in Section 13.1(a) or (c) for each Early
Termination Date or Renewal Settlement Date and the Lessee shall, as agent for
the Lessor, use its best efforts to sell all (but not less than all) of such
Vehicles to one or more purchasers on or prior to such Early Termination Date or
Renewal Settlement Date and the Lessor hereby authorizes the Lessee, acting on
behalf of the Lessor, to transfer to the purchaser of such Vehicle, “as-is,
where-is, with all faults,” all right, title and interest of the Lessor to such
Vehicle, without recourse or warranty, except for the absence of Lessor’s Liens.
For the avoidance of doubt, it is understood and agreed that, as such
Remarketing Agent, the Lessee is
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18
authorized to make transfers to purchasers in advance
of a Renewal Settlement Date, notwithstanding the fact that payment to the
Lessor in respect of the Vehicle so sold will not be made to the Lessor until
the Renewal Settlement Date as provided in Section 13.2(b). The Lessee or its
designee shall have the right to bid for and purchase any Vehicle as part of a
bona fide public sale pursuant to Section 13.1(c), provided that a public sale
need not be conducted if the Lessee reasonably believes that the net Fair Market
Sales Value which would be received at a bona fide public sale would be less
than the TRAC Amount.
(b) With
respect to each Vehicle for which the Lessee has exercised an early termination
option pursuant to Section 13.1(a) or (c) and which is sold pursuant to Section
13.2, the Lessee shall pay to the Lessor on the Early Termination Date or
Renewal Settlement Date, as applicable, or in the case of terminations pursuant
to Section 13.1(a) occurring in the final Rent Period of the Base Term, on the
date that the Base Term ends, an amount equal to the sum of (i) the Net Sales
Proceeds of such Vehicle, (ii) any Rent due and payable on such Early
Termination Date, Renewal Settlement Date, or in the case of terminations
pursuant to Section 13.1(a) occurring in the final Rent Period of the Base Term,
on the date that the Base Term ends, as applicable, (including, in the case of a
termination pursuant to 13.1(c), any TRAC Amount determined in accordance with
Sections 3.3(b) and (c)), (iii) to the extent not theretofore paid, Rent due and
payable prior to (but not on) such Early Termination Date, Renewal Settlement
Date, or the end of the Base Term, as applicable, and (iv) in case of a
termination pursuant to Section 13.1(a) (other than terminations under such
Section occurring during the final Rent Period of the Base Term), the excess of
the Termination Value of such Vehicle over the Net Sales Proceeds on such Early
Termination Date. Upon payment of all amounts specified in clauses (i), (ii) and
(iii) (and, in the case of a termination pursuant to 13.1(a) (other than
terminations under such Section occurring during the final Rent Period of the
Base Term), clause (iv)) above, the Lessee’s obligation to pay Basic Rent
hereunder for any period commencing after the date of payment of such amounts
shall be terminated with respect to such Vehicle and without further action such
Vehicle shall cease to be subject to the Lease.
SECTION
14. END OF
LEASE OPTIONS; DISPOSITION
14.1
Expiration
of Lease.
By notice to the Lessor not later than fifteen (15) days prior to the expiration
of the Base Term in respect of each Vehicle in the Fleet, the Lessee shall have
the following two options; provided,
however, if the
Lessee shall not have timely elected the option contained in clause (a) below,
it shall be deemed to have elected the Renewal Term as provided in clause (b)
below:
(a) The
Lessee may arrange for a sale of such Vehicle, effective as of the last day of
the Base Term therefor pursuant to Section 14.2(a). If the Lessee has not sold
such Vehicle effective as of the last day of the Base Term, the Lessee will be
deemed to have elected the Renewal Term for such Vehicle as provided in clause
(b) below.
(b) The
Lessee may elect, in respect of such Vehicle, a renewal term of twelve months
commencing on the expiration date of the Base Term (a “Renewal Term”). During
the Renewal Term in respect of such Vehicle, the Lessee shall pay Renewal Rent
for such Vehicle to the Lessor for each period during which Renewal Rent is
payable and occurring during such Renewal Term and payable on each Rent Payment
Date and on the Termination Date of the
Lease
Agreement
19
Lease (if such date is not a Rent Payment Date) in
respect of such Vehicle or, in the case of any Vehicle sold pursuant to Section
13.1(c), on the Renewal Settlement Date therefor. Unless the Lessee shall have
elected to terminate this Lease with respect to a Vehicle on a Renewal Sale Date
as provided in Section 13.1(c), the Lessee shall arrange a sale of such Vehicle
effective as of the last day of the Renewal Term therefor pursuant to Section
14.2(a).
14.2
Lessee
Sale of Vehicles.
(a) The Lessor hereby appoints the Lessee, and the Lessee hereby agrees to act,
as the exclusive Remarketing Agent for the Lessor with respect to all of the
Vehicles to be sold pursuant to Section 14.1(a) or (b) and the Lessee shall, as
agent for the Lessor, use its good faith efforts to sell each of the Vehicles in
the Fleet as of the date required by Section 14.1(a) or (b) for cash. The Lessor
hereby authorizes the Lessee, acting on behalf of the Lessor, to transfer to, or
to direct the Nominee to transfer to, the purchaser of such Vehicles, “as-is,
where-is, with all faults,” all right, title and interest of the Lessor and the
Nominee to such Vehicles, without recourse or warranty, except for the absence
of Lessor’s Liens. The Lessee or its designee shall have the right to bid for
and purchase any Vehicle as part of a bona fide public sale pursuant to this
Section, provided that a public sale need not be conducted if the Lessee
reasonably believes that the net Fair Market Sales Value which would be received
at a bona fide public sale would be less than the TRAC Amount. The Lessee’s
appointment as the Remarketing Agent for the Lessor in respect of a Vehicle
pursuant to this Section 14.2 shall (x) terminate on and as of the first day
following the end of the Lease Term in respect of such Vehicle and (y) be
suspended during the continuance of a Specified Default.
(b) With
respect to each Vehicle sold pursuant to Section 14.2(a), the Lessee shall pay
to the Lessor on the last day of the Base Term or Renewal Term, as the case may
be, (the “Remarketing Payment Date”), an amount equal to the sum of (i) the Net
Sales Proceeds of such Vehicle (as such Net Sales Proceeds may be decreased as
provided in Section 3.3(c)), (ii) any Rent due and payable on such date
(including any TRAC Amount payable by the Lessee as determined in accordance
with Section 3.3(b)), and (iii) to the extent not theretofore paid, Rent due and
payable prior to (but not on) such date.
(c) The
Lessee shall not be entitled to any compensation for its services as the
Remarketing Agent pursuant to Section 14.2(a).
(d) If the
Lessee shall have elected (or be deemed to have elected) the option set forth in
Section 14.1(b) in respect of a Vehicle, but shall not have arranged the sale of
such Vehicle on or prior to the last day of the Renewal Term in respect of such
Vehicle (such last day being herein called the “Remarketing Termination Date”),
the Lessee shall, at the Lessee’s sole expense, surrender such Vehicle to the
Lessor at one or more of the locations designated in Schedule I hereto or any
other mutually agreeable site and the Lessor shall either (i) use its best
efforts to remarket and sell such Vehicle which has not been sold (the “Unsold
Vehicle”) or (ii) appoint Lessee as its remarketing agent for such Unsold
Vehicle. Notwithstanding the foregoing, if the Lessor has elected the storage
option as provided in Section 14.3, the Unsold Vehicles in respect of which such
election has been made shall be stored at any of the Lessee’s sites in the
continental United States where it customarily holds such vehicles.
(e) In
addition, the Lessee shall pay to the Lessor on such Remarketing Termination
Date an amount equal to the sum of (i) the TRAC Amount of such Unsold
Vehicle
Lease
Agreement
20
as of the Remarketing Termination Date, (ii) any Rent
due and payable on such date, and (iii) to the extent not theretofore paid, Rent
due and payable prior to (but not on) such date.
(f) In the
event that the Lessee shall have surrendered any Unsold Vehicle to the Lessor
pursuant to Section 14.2(d), the Lessor shall pay to the Lessee the Net Sales
Proceeds on each date on which the Lessor sells any such Unsold Vehicle less any
amounts then due and unpaid by the Lessee to the Lessor hereunder.
(g) Upon the
payment of the amounts specified in Sections 14.2(b) or (e) in respect of a
Vehicle, the obligation of the Lessee to pay Rent with respect to the Vehicle
for which such amount is paid shall terminate.
(h) When an
Unsold Vehicle is surrendered by the Lessee to the Lessor upon the Lessor’s
election of its option pursuant to Section 14.2(d):
(i) The
Lessee shall deliver to the Lessor the documents furnished by the Manufacturer
of such Vehicle and such other documents in the Lessee’s or any Affiliate’s
possession relating to the maintenance and operation of such Vehicle and the
certificate of title of such Vehicle;
(ii) Such
Vehicle shall satisfy all the requirements of Section 14.3; and
(iii)
Subject
to the requirements of the last sentence of Section 14.3, the risk of loss with
respect to such Vehicle shall pass to the Lessor.
14.3
Condition
of a Vehicle at End of Lease;
Storage.
Upon any expiration or termination for any reason of this Lease with
respect to any Vehicle, such Vehicle, if the Lessee has not arranged the sale of
such Vehicle as of the end of the Lease Term therefor pursuant to Section
14.2(a), shall be free and clear of all Liens except for Lessor’s Liens, and the
Lessee shall have (a) caused such Vehicle to be in compliance with the
provisions of Section 7, (b) made all alterations and modifications to such
Vehicle required by then existing applicable law of the state where such Vehicle
is titled and registered for vehicles of the Vehicle’s Model Year, make and
model for the use and operation of such Vehicle, (c) caused such Vehicle to bear
a valid inspection certificate if required by the laws of such state, and (d)
furnished an Officer’s Certificate to the Lessor certifying that it has complied
with the provisions of this Section 14.3. In addition, upon any expiration or
termination for any reason of this Lease with respect to any Vehicle, if
requested by the Lessor, until such Vehicle is sold by the Lessor to the Lessee
or a third party in accordance with the terms of this Lease, but not for more
than 120 days after surrender of such Vehicle to the Lessor by the Lessee, the
Lessee shall, at its own cost and expense, maintain the Vehicle in the condition
required by Section 7, store the Vehicle at the site of surrender and keep the
Vehicle insured during such storage in accordance with Section 8.
14.4
Holding
Over.
In addition to amounts payable by the Lessee to the Lessor pursuant to Section
14.2, if, on the Remarketing Termination Date in respect of a Vehicle, such
Vehicle shall not have been delivered to the Lessor pursuant to Section 14.2(d),
the Lessee shall continue to pay Rent at a daily rate during such holding over
equal to 125% of the higher of Per Diem Rent and fair market rental value (as
determined by mutual agreement of the Lessee and the Lessor or, failing such
agreement, by an appraiser, at the Lessee’s expense, selected by
the
Lease
Agreement
21
Lessor and reasonably acceptable to the Lessee). Such
rent shall be payable on the last Business Day of each month. In the event any
Unsold Vehicles shall have been delivered to the Lessor pursuant to Section
14.2(d) and provided that no Default or Event of Default then exists, this Lease
shall terminate with respect to such Vehicles other than the Lessee’s
obligations under the last sentence of Section 14.3.
SECTION
15. CERTAIN
COVENANTS
15.1
Further
Assurances.
In each case at the Lessee’s cost and expense, the Lessor and the Lessee each
agree to take all such further action, and to execute and deliver all such
further documents or instruments, as the other party may reasonably request in
order to carry out the intent of this Lease and to consummate the transactions
contemplated hereby, including the titling and registration of Vehicles
hereunder, noting the security interest of the Lessor in the Vehicles on the
certificates of title issued pursuant hereto and taking all such other actions
(including, without limitation, filing such documents and instruments) as are
necessary or reasonably requested by the Lessor to maintain the Lessor’s
perfected first priority security interest in the Vehicles.
15.2
Filing
Financing and Continuation Statements.
To the fullest extent permitted by applicable law, and in each case at the
Lessee’s expense, the Lessor and the Lessee agree that the Lessor may file
financing and continuation statements, and may record and re-record and file and
refile all documents, which are necessary to effectuate or continue the interest
of the Lessor hereunder and the Lien of the assignment granted pursuant to
Section 17 without the signature of the Lessee.
SECTION
16. PAYMENT
DUTY ABSOLUTE
This
Lease is a net lease and notwithstanding any other provision of this Lease (but
subject to Section 3.3(c)) the Lessee’s obligation to pay Rent is absolute,
unconditional and without right of deduction, offset or abatement for any
reason, and shall continue in full force and effect and shall not be affected by
any circumstance including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right that the Lessee may have against the Lessor,
in its individual capacity or as trustee under the Trust Agreement, the Owner
Participant or any other Person for any reason whatsoever (whether in connection
with the transactions contemplated hereby or any other transactions), including,
without limitation, any breach by the Lessor or the Owner Participant of their
respective warranties, agreements or covenants contained in any of the Operative
Documents, (b) any defect in the title, registration, condition, design,
operation, or fitness for use of, or any damage to or loss or destruction of,
the Vehicles, or any interruption or cessation in or prohibition of the use or
possession thereof by the Lessee for any reason whatsoever, (c) any insolvency,
bankruptcy, reorganization or similar case or proceedings by or against the
Lessee or (d) any other circumstance, happening, or event whatsoever, whether or
not unforeseen or similar to any of the foregoing. If, for any reason
whatsoever, this Lease shall be terminated in whole or in part by operation of
law or otherwise, except as specifically provided herein, the Lessee nonetheless
agrees to pay an amount equal to each payment of Rent at the time such payment
would have become due and payable in accordance with the terms hereof had this
Lease not been terminated in whole or in part and if the Lessee fails to make
any such payment of such amount, such failure shall be treated
(after
Lease
Agreement
22
continuing unremedied for any applicable grace period
under Section 10) as if it were an “Event of Default” under Section 10 and the
Lessor shall be deemed to have those remedies provided for by Section 11. This
Lease shall be non-cancelable by the Lessee, and the Lessee hereby waives, to
the extent permitted by applicable law, any and all rights which it may now have
or which at any time hereafter may be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender this Lease, or to any
diminution or reduction of Rent payable by the Lessee hereunder except in
accordance with the express terms hereof. Nothing contained in this Section 16
shall prevent the Lessee from bringing a separate action for damages suffered by
the Lessee as a result of the breach by any Person of any obligation owed by it
to the Lessee or for equitable relief to obtain compliance with such obligation.
If any amounts under the Lease are prepaid by Lessee more than seven (7)
Business Days prior to the due date therefor, the Lessor may notify the Lessee
that it will hold such amounts as security for such payment obligation until due
and payable or may return such amounts to the Lessee.
SECTION 17. ASSIGNMENT
The
Lessee hereby assigns, transfers and conveys to the Lessor, as security for its
obligations under this Lease and the other Operative Documents, all its right,
title and interest in and to the Vehicles described in each Lease Supplement,
together with all accessions, attachments, replacements, substitutions,
modifications and additions thereto and all proceeds thereof.
SECTION
18. MISCELLANEOUS
18.1
Notices.
All notices and other communications required under the terms and provisions
hereof shall be given and shall become effective in accordance with the
provisions of Section 8 of the Participation Agreement. The Lessee shall furnish
the Owner Participant with a copy of all reports, notices, requests, demands,
certificates and other instruments furnished hereunder.
18.2
Survival.
The provisions of Section 6 of the Participation Agreement are incorporated
herein by reference.
18.3
Confidentiality.
Each party hereto hereby reaffirms and incorporates herein by reference the
terms and conditions of its respective duties and obligations under Section 11
of the Participation Agreement.
18.4
Amendments.
Neither this Lease, nor any term or provision hereof, can be amended, waived,
modified, supplemented, discharged or terminated, except, subject to Section
13(j) of the Participation Agreement, by an instrument in writing which is
signed by the Lessor and the Lessee.
18.5
Severability.
If any provision of this Lease, or the application thereof to any Person or
circumstance, shall, for any reason or to any extent, be invalid or
unenforceable, such invalidity or unenforceability shall not in any manner
affect or render invalid or unenforceable the remainder of this Lease, and the
validity and enforceability of that provision with respect to other persons or
circumstances or in other jurisdictions shall not be affected but, rather, shall
be enforced to the extent permitted by applicable law.
Lease
Agreement
23
18.6
Successors
and Assigns.
Subject to the provisions of Sections 9 and 13(c) of the Participation
Agreement, the terms and provisions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
18.7
Counterparts.
This Lease and any amendment, modification, waiver or supplement hereto may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall (subject to Section 18.11) be an original for all
purposes, but all such counterparts shall together constitute but one and the
same instrument.
18.8
Construction.
The section and paragraph headings in this Lease and the table of contents
hereof are for convenience of reference only and shall neither be deemed to be a
part of this Lease nor modify, define, expand or limit any of the terms or
provisions hereof. All references herein to numbered or lettered sections,
schedules or exhibits, unless otherwise indicated, are to sections, schedules
and exhibits to this Lease. Words and definitions in the singular shall be read
and construed as though in the plural and vice versa, and words in the
masculine, neuter or feminine gender shall be read and construed as though in
either of the other genders where the context so requires.
18.9
Governing
Law.
This Lease shall be construed and enforced in accordance with and governed by
the law of the State of New York.
18.10
The
Lessor Not Acting in Individual Capacity.
This Lease is entered into by Wilmington Trust Company not individually but as
the Owner Trustee under the Trust Agreement, in exercise of the power and
authority conferred upon and invested in the Owner Trustee by the Trust
Agreement, and it is expressly understood and agreed that nothing in this Lease
shall be construed as creating any liability (other than for willful misconduct
or gross negligence) of Wilmington Trust Company, to pay any sum or to perform
any covenant, either express or implied, in this Lease (all such liability, if
any, being expressly waived by the Lessee) and that the Lessee, on behalf of
itself and its successors and assigns, agrees in the case of any liability of
Wilmington Trust Company hereunder (except for such liability attributable to
willful misconduct or gross negligence) that it will look solely to the assets
of the Lessor’s Estate; provided,
however, that
Wilmington Trust Company in its individual capacity, shall in any event be
liable with respect to this Lease insofar as the breach thereof relates to the
Lessor’s Liens or other defects of title resulting from claims against or acts
or breaches by the Owner Trustee in its individual capacity or involving its
gross negligence or willful misconduct; and provided
further that the
foregoing exculpations of the Owner Trustee shall not be deemed to be
exculpations of any other Person.
18.11
Chattel
Paper.
To the extent, if any, that this Lease constitutes chattel paper (as such term
is defined in the U.C.C.), no security interest in this Lease may be created or
perfected through the transfer of possession of any counterpart hereof other
than the original counterpart which shall be the counterpart containing the
receipt therefor executed by the Lessor on the signature page
hereof.
18.12
Forum
Selection and Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
Lease
Agreement
24
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW
YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED,
HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY VEHICLE OR OTHER PROPERTY MAY BE
BROUGHT, AT THE LESSOR’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
VEHICLE OR OTHER PROPERTY MAY BE FOUND. THE LESSEE HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE LESSEE FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK. THE LESSEE HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
LESSEE HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, THE LESSEE HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER OPERATIVE
DOCUMENTS.
18.13
Waiver
of Jury Trial.
THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THE
LESSEE ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER
OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LESSOR’S ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER
OPERATIVE DOCUMENT.
Lease
Agreement
25
IN
WITNESS WHEREOF, the Lessor and the Lessee have each caused this Lease to be
duly executed and delivered as of the day and year first above
written.
|
BRAC
TRUST NO. 2005-[ ], by Wilminton Trust Company, not in its individual
capacity but solely in its capacity as the trustee under the Trust
Agreement, as Lessor | ||
|
By |
| |
|
Title:
| ||
|
BUDGET
RENT A CAR SYSTEM, INC., as Lessee | ||
|
By |
| |
|
Title:
| ||
|
WILMINGTON
TRUST COMPANY, in its individual capacity only to the extent set forth in
Section 18.10 hereof and otherwise not in its individual capacity but
solely as trustee under the Trust Agreement (BRAC Trust No. 2005-[
]) | ||
|
By |
| |
|
Title:
| ||
Lease
Agreement
Receipt
of the original executed counterpart of the foregoing Lease Agreement is hereby
acknowledged this __ day of May, 2005.
BRAC
Trust No. 2005-[ ], by
Wilmington
Trust Company,
not in
its individual capacity but solely
as the
trustee under the Trust Agreement
|
By: |
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Title: |
Lease
Agreement
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SCHEDULE
I | |
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to
the | |
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Lease
Agreement |
RETURN
LOCATIONS
Any of
the following sites:
Lease
Agreement
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SCHEDULE
II | |
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to
the | |
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Lease
Agreement |
Closing
Date Rent Factors
Lease
Agreement
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SCHEDULE
III | |
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to
the | |
|
Lease
Agreement |
Pricing
Assumptions
Lease
Agreement
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SCHEDULE
IV | |
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to
the | |
|
Lease
Agreement |
TRAC
AMOUNTS
|
TRAC
Percentage | |
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Renewal
TRAC Percentage |
Lease
Agreement
|
SCHEDULE
V | |
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to
the | |
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Lease
Agreement |
Closing
Date Renewal Termination Values
Lease
Agreement
|
EXHIBIT
A | |
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to
the | |
|
Lease
Agreement |
TRAC
CERTIFICATE
This
Certification is required in accordance with Section 7701(h) of the Internal
Revenue Code of 1986 (the “Code”).
I. The
Lessor and the Lessee intend that the Lease be a “qualified motor vehicle
operating agreement” as defined in the Code, therefore it is
agreed:
(a) The
Lessor shall be the owner of each Vehicle for all purposes, including, without
limitation, state and federal income, sales and other applicable tax
purposes.
(b) The
Lessee’s certification shall apply to all Vehicles available for delivery to the
Lessee on or after the date hereof.
II. The
Lessee hereby certifies, under penalty of perjury, that it intends that more
than fifty percent (50%) of the use of each Vehicle leased from the Lessor is to
be in a trade or business of the Lessee. The Lessee has been advised that it
will not be treated as the owner of such vehicles for federal income tax or
other tax purposes.
III. Without
representation as to the correctness of such certification and without any duty
of inquiry of any nature, the Lessor has no knowledge that the Lessee’s
certifications herein stated are false.
Executed
as of __________________________, 20___.
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| |||
|
BRAC
TRUST NO. 2005-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement |
BUDGET
RENT A CAR SYSTEM, INC. | |||
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By |
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By |
| |
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Title |
|
Title |
| |
Lease
Agreement
|
EXHIBIT
B | |
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to
the | |
|
Lease
Agreement |
NOTE: THIS
LEASE SUPPLEMENT HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. ONLY THE ORIGINAL
COUNTERPART OF THIS LEASE SUPPLEMENT CONTAINING THE RECEIPT THEREFOR
EXECUTED BY WILMINGTON TRUST COMPANY, AS OWNER TRUSTEE, ON THE SIGNATURE
PAGE THEREOF, EVIDENCES THE MONETARY OBLIGATIONS OF THE
LESSEE HEREUNDER AND TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT
CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY
INTEREST IN THIS LEASE SUPPLEMENT MAY BE CREATED THROUGH THE TRANSFER OR
POSSESSION OF ANY COUNTERPART OTHER THAN SAID ORIGINAL EXECUTED
COUNTERPART.
LEASE
SUPPLEMENT NO. [ ]
LEASE
SUPPLEMENT No. [ ], dated [ ], 2005, between BRAC TRUST NO. 2005-[ ], as Lessor
(the “Lessor”), and BUDGET RENT A CAR SYSTEM, INC. (the “Lessee”).
Reference
is made to the Lease Agreement (BRAC Trust No. 2005-[ ]) dated as of May ___,
2005 (the “Lease”), between the Lessor and the Lessee. Capitalized terms used
herein without definition have the respective meanings specified therefor in the
Lease.
NOW,
THEREFORE, the Lessor and the Lessee hereby agree as follows:
1. The
Lessor hereby delivers and leases to the Lessee under the Lease, and the Lessee
hereby unconditionally accepts and leases from the Lessor under the Lease, the
Eligible Vehicles identified in Schedule A hereto (the “Vehicles”).
2. Schedule
A hereto contains for each Vehicle (i) the Specific Identification; (ii) the
Purchase Price; (iii) the Per Diem Rent Factor (if applicable) pertaining to
each of the Base Term and the Renewal Term; (iv) the Quarterly Rent Factor
pertaining to each of the Base Term and the Renewal Term; and (v) the Scheduled
Expiration Date.
3. Schedule
B hereto contains a schedule of percentages to be used in calculating
Termination Value pertaining to each of the Base Term and the Renewal
Term.
4. Schedule
C hereto contains a schedule of rent allocations as contemplated by Section 3.2
of the Lease.
5. Annex A
hereto is a TRAC Certificate executed and delivered by the Lessee with respect
to the Vehicles. All the terms of Annex A are hereby incorporated and made a
part hereof.
6. The
Lessor and the Lessee hereby confirm that the Funding Date with respect to the
Vehicles is the date of this Lease Supplement.
Lease
Agreement
EXHIBIT
B
Page
2
7. All of
the terms and provisions of the Lease are hereby incorporated by reference in
this Lease Supplement to the same extent as if fully set forth
herein.
Lease
Agreement
EXHIBIT
B
Page
3
IN
WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease Supplement No.
[ ] to be duly executed as of the day and year first above written.
|
BRAC
TRUST NO. 2005-[ ], by Wilmington Trust Company, acting in its individual
capacity only to the extent expressly stated in Section 18.10 of the Lease
and otherwise not in its individual capacity but solely as trustee under
the Trust Agreement (BRAC Trust No. 2005-[ ]) dated as of May
[ ], 2005, as Lessor | ||
|
By: |
| |
|
Title: | ||
|
BUDGET
RENT A CAR SYSTEM, INC., as Lessee | ||
|
By: |
| |
|
Title: | ||
Receipt
of the original executed counterpart of the foregoing Lease Supplement (BRAC
Trust No. 2005-[ ]) No. ____ is hereby acknowledged this ___ day of [ ],
2005.
BRAC
Trust No. 2005-[ ], by Wilmington Trust
not in
its individual capacity but solely
as
trustee under the Trust Agreement
|
By |
|
Lease
Agreement
EXHIBIT
B
Page
4
IN
WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease Supplement No.
____ to be duly executed as of the day and year first above
written.
|
BRAC
TRUST NO. 2005-[ ], by Wilmington Trust Company, acting in its individual
capacity only to the extent expressly stated in Section 18.10 of the Lease
and otherwise not in its individual capacity but solely as trustee under
the Trust Agreement (BRAC Trust No. 2005-[ ]) dated as of May
[ ], 2005, as Lessor | ||
|
By |
| |
|
Title: | ||
|
BUDGET
RENT A CAR SYSTEM, INC., as Lessee | ||
|
By |
| |
|
Title: | ||
Lease
Agreement
|
SCHEDULE
A | |
|
to
the | |
|
Lease
Supplement |
INFORMATION
RELATING TO VEHICLES
|
Make/Model
of
Vehicle |
V.I.N.
Number |
Unit
Number |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Vehicle
Type |
Per
Diem Rent Factor |
Quarterly
Rent Factor |
Scheduled
Expiration
Date |
Lease
Agreement
|
SCHEDULE
B | |
|
to
the | |
|
Lease
Supplement |
TERMINATION
VALUE PERCENTAGES
Lease
Agreement
|
SCHEDULE
C | |
|
to
the | |
|
Lease
Supplement |
RENT
ALLOCATIONS
Lease
Agreement
|
ANNEX
A | |
|
to
the | |
|
Lease
Supplement |
Lease
Agreement
Exhibit
10.3
GUARANTY
(BRAC
Trust No. 2005-[ ])
Dated as
of May ___, 2005
by
CENDANT
CORPORATION,
as
Guarantor
in favor
of
THE
BENEFICIARIES NAMED HEREIN
Guaranty
TABLE
OF CONTENTS
|
Page |
ARTICLE
I
DEFINITIONS
ARTICLE
II
GUARANTY
PROVISIONS
|
SECTION
2.1. |
Guaranty |
2 |
|
SECTION
2.2. |
Acceleration
of Guaranty |
2 |
|
SECTION
2.3. |
Guaranty
Absolute, etc. |
3 |
|
SECTION
2.4. |
Reinstatement,
etc. |
4 |
|
SECTION
2.5. |
Waiver,
etc. |
4 |
|
SECTION
2.6. |
Waiver
of Subrogation |
4 |
|
SECTION
2.7. |
Successors,
Transferees and Assigns, etc. |
5 |
|
SECTION
2.8. |
Release
of Guarantor |
5 |
|
SECTION
2.9. |
Merger,
Consolidation, Sale |
5 |
ARTICLE
III
MISCELLANEOUS
PROVISIONS
|
SECTION
3.1. |
Participation
Agreement |
6 |
|
SECTION
3.2. |
Binding
on Successors, Transferees and Assigns; Assignment |
6 |
|
SECTION
3.3. |
Amendments,
etc. |
6 |
|
SECTION
3.4. |
Addresses
for Notices to the Guarantor |
7 |
|
SECTION
3.5. |
No
Waiver; Remedies |
7 |
|
SECTION
3.6. |
Section
Captions |
7 |
|
SECTION
3.7. |
Setoff |
7 |
|
SECTION
3.8. |
Severability |
7 |
|
SECTION
3.9. |
Governing
Law, Entire Agreement, etc. |
7 |
|
SECTION
3.10. |
Forum
Selection and Consent to Jurisdiction |
8 |
|
SECTION
3.11. |
Waiver
of Jury Trial |
8 |
Guaranty
GUARANTY
(BRAC
Trust No. 2005-[ ])
THIS
GUARANTY (BRAC Trust No. 2005-[ ]) (this “Guaranty”), dated
as of May ___, 2005, is made by CENDANT CORPORATION, a Delaware corporation (the
“Guarantor”), in
favor of each of the Beneficiaries (as defined below).
W I T N E S S E T H:
WHEREAS,
the Guarantor, Budget Rent A Car System, Inc. (the “Lessee”), BRAC
Trust No. 2005-[ ], as Owner Trust (the “Owner
Trust”),
[OWNER PARTICIPANT] (the “Owner
Participant”) and
Wilmington Trust Company, not in its individual capacity except as expressly set
forth therein but otherwise solely as Owner Trustee, have entered into a
Participation Agreement (BRAC Trust No. 2005-[ ]), dated as of May ___, 2005
(the “Participation
Agreement”),
providing for the purchase and sale of certain Vehicles; and
WHEREAS,
the Lessee, the Owner Trust and Budget Truck Trust I (the “Nominee”; the
Nominee, the Nominee Trustee, the Owner Participant, the Owner Trustee and the
Owner Trust are sometimes referred to herein as the “Beneficiaries” or,
individually, as a “Beneficiary”) have
entered into the Nominee Agreement, dated as of May ___, 2005 (the “Nominee
Agreement”);
and
WHEREAS,
the Owner Trust and the Lessee propose to enter into the Lease as contemplated
by the Participation Agreement; and
WHEREAS,
it is a condition precedent to the transactions contemplated by the
Participation Agreement that the Guarantor guarantee, among other things, the
obligations of the Lessee under the Operative Documents, including the Nominee
Agreement, in favor of the Beneficiaries; and
WHEREAS,
the Guarantor has duly authorized the execution, delivery and performance of
this Guaranty; and
WHEREAS,
it is in the best interests of the Guarantor to execute this Guaranty inasmuch
as the Guarantor will derive direct and indirect benefits from the transactions
contemplated by the Participation Agreement and the other Operative
Documents;
NOW
THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged, and in order to induce each of the Beneficiaries to enter into and
to perform its obligations under the Participation Agreement and to enter into
and perform its obligations under the other Operative Documents to which it is a
party, the Guarantor agrees, for the benefit of each Beneficiary, as
follows:
Guaranty
ARTICLE
I
DEFINITIONS
Unless
otherwise defined herein or the context otherwise requires, terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in
Appendix A to the Participation Agreement.
ARTICLE
II
GUARANTY
PROVISIONS
SECTION
2.1. Guaranty.
The Guarantor hereby absolutely, unconditionally and irrevocably:
(a) guarantees,
as a primary obligor and not merely as a surety, the full and punctual payment
when due of all Rent, and all other monetary obligations of the Lessee now or
hereafter existing under the Lease or any other Operative Document (including
all such amounts which would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
§362(a), and the operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. §502(b) and 506(b));
(b) guarantees
the full and prompt performance and observance by the Lessee of each and all
other covenants and agreements not described in clause
(a) above
required to be performed or observed by the Lessee under the terms of the
Operative Documents; and
(c) indemnifies
and holds harmless each Beneficiary for any and all costs and expenses
(including reasonable attorney’s fees and expenses) incurred or expended by such
Beneficiary in enforcing any rights or privileges of such Beneficiary under this
Guaranty.
This
Guaranty constitutes a guaranty of payment and performance when due and not of
collection, and the Guarantor specifically agrees that it shall not be necessary
or required that any Beneficiary exercise any right, assert any claim or demand
or enforce any remedy whatsoever against the Lessee (or any other Person) before
or as a condition to the obligations of the Guarantor hereunder.
SECTION
2.2. Acceleration
of Guaranty.
The Guarantor agrees that, in the event of the dissolution or insolvency
of the Lessee or the Guarantor, or the inability or failure of the Lessee or the
Guarantor to pay material debts as they become due, or an assignment by the
Lessee or the Guarantor for the benefit of creditors, or the commencement of any
case or proceeding in respect of the Lessee or the Guarantor under any
bankruptcy, insolvency or similar laws, and if such event shall occur at a time
when any of the Rent or other monetary obligations of the Lessee may not then be
due and payable, the Guarantor will pay to the Beneficiaries forthwith the full
amount which would be payable by the Lessee if the Beneficiaries had been
permitted to exercise and had exercised, with respect to each Vehicle then
subject to the Lease, the remedy set
Guaranty
(2)
forth in Sections 11(a)(v)(A), (B) and (C)(l) of the
Lease. Upon the payment of such amount, each such Vehicle shall be transferred
to the Person lawfully entitled thereto.
SECTION
2.3. Guaranty
Absolute, etc..
This Guaranty shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment and performance, and shall remain in full force
and effect until all obligations of the Lessee under the Operative Documents
have been paid or performed, as the case may be, in full, all obligations of the
Guarantor hereunder shall have been paid or performed, as the case may be, in
full and all obligations of a Beneficiary to fund the Purchase Price of Vehicles
shall have terminated. The Guarantor guarantees that all Rent and other monetary
obligations of the Lessee will be paid, and all other obligations of the Lessee
will be performed, strictly in accordance with the terms of the Lease and each
other Operative Document under which they arise, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Beneficiary with respect thereto,
provided, that
neither the Guarantor nor the Lessee shall be required to perform an obligation
in violation of any such law, regulation or order. The liability of the
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a) any lack
of validity, legality or enforceability of the Lease or any other Operative
Document;
(b) the
failure of any Beneficiary:
(i) to assert
any claim or demand or to enforce any right or remedy against the Lessee or any
other Person (including any other guarantor), or to mitigate any damages, under
the provisions of the Lease, any other Operative Document or otherwise,
or
(ii) to
perfect any Lien or to exercise any right or remedy against any other guarantor
of, or collateral securing, any obligations of the Lessee under the Lease or any
other Operative Document;
(c) any
change in the time, manner or place of payment or performance of, or in any
other term of, all or any of the obligations of the Lessee under the Lease or
any other Operative Document, or any other extension, compromise or renewal of
any obligation of the Lessee under the Lease or any other Operative
Document;
(d) any
amendment, indulgence, reduction, limitation, impairment or termination of any
obligation of the Lessee under the Lease or any other Operative Document for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and the Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, waiver, settlement, release, discharge,
unenforceability of, or any other event or occurrence affecting, any obligation
of the Lessee under the Lease or any other Operative Document, provided, nothing
herein shall prevent assertion of any claim by separate suit or compulsory
counterclaim;
Guaranty
(3)
(e) any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Lease or any other Operative
Document;
(f) any
addition, exchange, release, surrender or nonperfection of any collateral, or
any amendment to or waiver or release or addition of, or consent to departure
from, any other guaranty, held by any Beneficiary securing any of the
obligations of the Lessee under the Lease or any other Operative Document;
(g) the
exercise by any Beneficiary of any right or remedy under an Operative Document;
or
(h) any other
condition or circumstance that might otherwise constitute a legal or equitable
discharge, release, counterclaim, offset or defense of a surety or guarantee, or
that might otherwise limit recourse against the Guarantor.
SECTION
2.4. Reinstatement,
etc..
The Guarantor agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the obligations of the Lessee under the Lease or any other Operative
Document is rescinded or must otherwise be restored by any Beneficiary, upon the
insolvency, bankruptcy or reorganization of the Lessee or otherwise, all as
though such payment had not been made.
SECTION
2.5. Waiver,
etc.
The Guarantor hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the obligations of the Lessee under the
Lease, this Guaranty, and any other Operative Document and any requirement that
the Owner Trust or any other Beneficiary protect, secure, perfect or insure any
Lien, or any property subject thereto, or exhaust any right or take any action
against the Lessee or any other Person (including any other guarantor) or entity
or any collateral securing the obligations of the Lessee under the Lease and
each other Operative Document.
SECTION
2.6. Waiver
of Subrogation.
The Guarantor hereby irrevocably waives any claim or other rights which it may
now or hereafter acquire against the Lessee that arise from the existence,
payment, performance or enforcement of the Guarantor’s obligations under this
Guaranty or any other Operative Document, including any right of subrogation,
reimbursement, exoneration, or indemnification, any right to participate in any
claim or remedy of the Beneficiaries against the Lessee or any collateral which
the Owner Trust now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity, or under contract, statute or common law, including
the right to take or receive from the Lessee, directly or indirectly, in cash or
other property or by setoff or in any manner, payment or security on account of
such claim or other rights. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, such amount shall be deemed to have been
paid to the Guarantor for the benefit of, and held in trust for, the
Beneficiaries, and shall forthwith be paid to the Beneficiaries to be credited
and applied upon the obligations of the Lessee to the Beneficiaries under the
Lease and the other Operative Documents, whether matured or unmatured. The
Guarantor acknowledges that it will receive direct and indirect benefits from
the transactions contemplated by the Lease and the other
Guaranty
(4)
Operative Documents and that the waiver set forth in
this Section is knowingly made in contemplation of such
benefits.
SECTION
2.7. Successors,
Transferees and Assigns, etc..
This Guaranty shall:
(a) be
binding upon the Guarantor, and its successors, transferees and assigns;
and
(b) inure to
the benefit of and be enforceable by the Beneficiaries.
Without
limiting the generality of the foregoing clause
(b), any
Beneficiary may assign or otherwise transfer (in whole or in part) any interest
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Beneficiary under any Operative Document (including this Guaranty) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 9.1 of the Participation Agreement
and Article IX of the Trust Agreement.
SECTION
2.8. Release
of Guarantor.
The Guarantor shall be released from its obligations hereunder, and this
Guaranty shall terminate and be of no further force and effect, if there has
been a merger or consolidation of, or a sale of all or substantially all of the
assets of, the Lessee pursuant to and in accordance with Section 5.4 of the
Participation Agreement (a “Merger
Event”) under
circumstances in which the condition set forth in clause (ii)(A) of Section 5.4
of the Participation Agreement shall have been met. The Beneficiaries shall
execute such agreements, documents or instruments evidencing the foregoing
release as shall be reasonably requested by the Guarantor and at its
expense.
SECTION
2.9. Merger,
Consolidation, Sale.
The Guarantor shall not permit or effect any consolidation of Guarantor with, or
merger or liquidation (as part of a business reorganization or restructuring) of
the Guarantor into, any other corporation or other entity (whether or not
affiliated with Guarantor), any other business combination or association
involving the Guarantor, or successive consolidations, mergers, liquidations (as
a part of a business reorganization or restructuring) or other business
combinations or associations to which Guarantor or its successor or successors
shall be a party or parties, or any sale or conveyance of the property of the
Guarantor as an entirety or substantially as an entirety to any other
corporation or entity (whether or not affiliated with the Guarantor) authorized
to acquire and operate the same unless the following conditions are satisfied:
upon any such consolidation, merger, liquidation, business combination or
association, sale or conveyance (a “Merger
Event”), (i)
unless the Guarantor prior to such Merger Event is the Surviving Entity (as
hereinafter defined), the due and punctual performance of all of the obligations
of the Guarantor under the Operative Documents to which it is a party shall be
assumed in writing by the corporation or other entity formed by such
consolidation, or into which the Guarantor shall have been merged or liquidated,
or which shall have resulted from such business combination or association, or
which shall have acquired such property (the “Surviving
Entity”); (ii)
the Surviving Entity shall be a Qualified Merger Entity or shall have all of its
obligations under the Operative Documents guaranteed by a Qualified Merger
Entity pursuant to a guaranty substantially similar to the Guaranty or letter of
credit or other form of collateral in acceptable form to the Lessor; (iii) after
giving effect to the transaction, no Event of Default or Specified Default shall
exist; (iv) unless
Guaranty
(5)
the Guarantor prior to such Merger Event is the
Surviving Entity, the Guarantor will, if requested by the Owner Participant,
deliver to the Owner Participant an opinion or opinions of White & Case LLP
and, with respect to general corporate matters, internal counsel to the
Surviving Entity, or any other counsel reasonably acceptable to the Owner
Participant, (which opinion or opinions shall be delivered prior to or
simultaneously with the consummation of the transaction) stating that the
Surviving Entity is duly organized under the laws of the state or other
jurisdiction of its organization, that each such assumption agreement and/or
collateral agreement is duly authorized, executed and delivered and is
enforceable in accordance with its terms, that no violation of law applicable to
or binding on the Surviving Entity will result from the Surviving Entity’s being
party to such assumption agreement and/or collateral agreements and the
Operative Documents (to the extent provided in such assumption agreement), and
that the Guaranty in enforceable in accordance with its terms (subject, in each
case, to customary exceptions and qualifications), and if the Surviving Entity
is not a United States entity, such opinions of counsel in the country in which
the Surviving Entity is domiciled as are customarily required with respect to
foreign guarantors; (v) all filings and notices shall have been made so as to
perfect the interests of the Lessor and Owner Participant in any security
delivered pursuant to clause (ii) above, together with satisfactory legal
opinions regarding the creation and perfection of such security and (vi) unless
the Guarantor prior to such Merger Event is the Surviving Entity, Owner
Participant shall have received such other certificates of the Surviving Entity
and/or the new Guarantor with respect to incumbency, due organization, due
authorization, representations and warranties and absence of defaults. The
Guarantor shall provide not less than 20 days’ prior written notice of any
transaction of the kind described in this Section 2.9 to the Lessor and the
Owner Participant which notice shall include information with respect to any
Qualified Merger Entity which is proposed to be the Guarantor
hereunder.
ARTICLE
III
MISCELLANEOUS
PROVISIONS
SECTION
3.1. Participation
Agreement.
This Guaranty is an Operative Document executed pursuant to the Participation
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions
thereof.
SECTION
3.2. Binding
on Successors, Transferees and Assigns; Assignment.
In addition to, and not in limitation of, Section
2.7, this
Guaranty shall be binding upon the Guarantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Beneficiary
and its respective successors, transferees and assigns (to the full extent
provided pursuant to Section
2.7);
provided,
however, that
the Guarantor may not delegate or assign any of its obligations hereunder
without the prior written consent of the Owner Participant.
SECTION
3.3. Amendments,
etc..
No amendment to or waiver of any provision of this Guaranty, nor consent to any
departure by the Guarantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Owner Trust, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Guaranty
(6)
SECTION
3.4. Addresses
for Notices to the Guarantor.
Unless otherwise expressly specified or permitted by the terms hereof, all
notices, requests, demands, authorizations, directions, consents, waivers or
documents provided or permitted by this Guaranty to be made, given, furnished or
filed to the Guarantor shall be in writing, by overnight courier, or by
confirmed telecopy to the address or facsimile number set forth opposite the
Guarantor’s name on Schedule IV to the Participation Agreement. All such notices
shall be deemed given and such requirement satisfied when such notice is
received. The Guarantor may change the address to which notices to the Guarantor
will be sent by giving notice of such change to the Owner Trust.
SECTION
3.5. No
Waiver; Remedies.
In addition to, and not in limitation of, Section
2.3 and
Section
2.5, no
failure on the part of any Beneficiary to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION
3.6. Section
Captions.
Section captions used in this Guaranty are for convenience of reference only,
and shall not affect the construction of this Guaranty.
SECTION
3.7. Setoff.
In addition to and not in limitation of all other rights and remedies (including
other rights of offset or banker’s lien) that any Beneficiary may have under
applicable law, each Beneficiary shall, upon the occurrence and during the
continuance of any Event of Default, have the right to appropriate and apply to
the payment of any monetary obligations of the Lessee under the Lease or any
other Operative Document owing to it (whether or not then due), in such order of
application as such Beneficiary may elect, any and all balances, credits,
deposits (general or special, time or demand, provisional or final), accounts or
moneys of the Guarantor then or thereafter with such Beneficiary. Each
Beneficiary agrees promptly to notify the Guarantor after any such setoff and
application made by such Beneficiary; provided,
however, that
the failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Beneficiary under this Section are in addition
to other rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Beneficiary may have.
SECTION
3.8. Severability.
Wherever possible each provision of this Guaranty shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Guaranty shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Guaranty.
SECTION
3.9. Governing
Law, Entire Agreement, etc.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK. THIS GUARANTY AND THE OTHER OPERATIVE DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE GUARANTOR AND THE BENEFICIARIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
Guaranty
(7)
SECTION
3.10. Forum
Selection and Consent to Jurisdiction.
ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE BENEFICIARIES OR THE GUARANTOR SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE
OWNER TRUST’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY
BE FOUND. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE GUARANTOR WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON GUARANTOR, AND
AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED
TO THE GUARANTOR AT THE ADDRESS STATED IN THE PARTICIPATION AGREEMENT AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY AND THE OTHER OPERATIVE DOCUMENTS.
SECTION
3.11. Waiver
of Jury Trial.
THE
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE BENEFICIARIES OR THE GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BENEFICIARIES ENTERING INTO THE
OPERATIVE DOCUMENTS TO WHICH THEY ARE PARTIES.
Guaranty
(8)
IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.
|
CENDANT
CORPORATION | ||
|
By:
|
| |
|
Name:
Ronald L. Nelson | ||
|
Title:
President and Chief Financial Officer | ||
Guaranty
(9)